Securities and Exchange Commission
                                Washington, D.C.  20549

                                       Form 10-K

(X)  Annual Report Pursuant to Section 13 or 15(d) of the
Securities        Exchange Act of 1934
For the fiscal year ended December 31, 1995
or
( )  Transition Report Pursuant to Section 13 or 15(d) of the
Securities      Exchange Act of 1934
For the transition period from ____________ to ____________
Commission file number 0-11951

                                      JSCE, Inc.
      (Exact name of registrant as specified in its charter)
           Delaware                                37-1337160
(State of incorporation or organization)      (I.R.S. Employer    
                                               Identification)    
   
       Jefferson Smurfit Centre
       8182 Maryland Avenue
        St. Louis, Missouri                            63105
(Address of principal executive offices)           (Zip Code)
                                           
       Registrant's Telephone Number: (314) 746-1100
                            

Securities registered pursuant to Section 12(b) of the Act:    NONE


Securities registered pursuant to Section 12(g) of the Act:    NONE
                                              
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.   Yes   X   No      

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

As of January 31, 1996, none of the registrant's voting stock was
held by non-affiliates.

The number of shares outstanding of the registrant's common stock
as of January 31, 1996:  1,000

DOCUMENTS INCORPORATED BY REFERENCE:      
                                                            Part of Form 10-K
                                                                into Which
                                                                Document is
             Document                                          Incorporated 

Sections of JSC's Proxy Statement for the Annual Meeting            III
of Stockholders to be held on May 9, 1996
<PAGE>
                                      JSCE, Inc.

                              Annual Report on Form 10-K

                                   December 31, 1995


                                   TABLE OF CONTENTS
                                                                             
                                        PART I
                                                                        Page

Item  1.     Business . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Item  2.     Properties . . . . . . . . . . . . . . . . . . . . . . . . . 7

Item  3.     Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 7

Item  4.     Submission of Matters to a Vote of Security Holders. . . . .11


                                        PART II

Item  5.     Market for Registrant's Common Equity and
             Related Stockholder Matters. . . . . . . . . . . . . . . . .11

Item  6.     Selected Financial Data. . . . . . . . . . . . . . . . . . .12

Item  7.     Management's Discussion and Analysis of Financial
             Condition and Results of Operations  . . . . . . . . . . . .14

Item  8.     Financial Statements and Supplementary Data. . . . . . . . .22

Item  9.     Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure . . . . . . . . . . .46


                                       PART III

Item 10.     Directors and Executive Officers of the Registrant . . . . .46

Item 11.     Executive Compensation . . . . . . . . . . . . . . . . . . .50

Item 12.     Security Ownership of Certain Beneficial Owners and
             Management . . . . . . . . . . . . . . . . . . . . . . . . .50

Item 13.     Certain Relationships and Related Transactions . . . . . . .50


                                        PART IV

Item 14.     Exhibits, Financial Statement Schedules and Reports 
             on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . .51
<PAGE>
                                        PART I

ITEM 1.  BUSINESS

GENERAL
JSCE, Inc. is a wholly-owned subsidiary of Jefferson Smurfit
Corporation ("JSC").  JSCE, Inc. and where appropriate, its
consolidated subsidiaries, are hereinafter collectively referred to
as "JSCE" or the "Company".  JSC has no operations other than its
investment in the Company.  The Company owns a 100% equity interest
in Jefferson Smurfit Corporation (U.S.) ("JSC(U.S.)").  JSC (U.S.)
has extensive operations throughout the United States.  

The Company operates in two business segments, Paperboard/Packaging
Products and Newsprint.  The Company believes it is one of the
nation's largest producers of paperboard and packaging products and
is the largest producer of recycled paperboard and recycled
packaging products and the largest processor of wastepaper.  In
addition, the Company believes it is one of the nation's largest
producers of recycled newsprint.  

The Company's Paperboard/Packaging Products segment includes a
system of  paperboard mills that, in 1995, produced 1,905,000 tons
of virgin and recycled containerboard, 773,000 tons of coated and
uncoated recycled boxboard and solid bleached sulfate ("SBS") and
192,000 tons of recycled cylinderboard, which were sold to the
Company's own converting operations and to third parties.  The
Company's converting operations consist of 51 corrugated container
plants, 18 folding carton plants, and 22 industrial packaging
plants located across the country, with three plants located
outside the U.S.  In 1995, the Company's container plants converted
1,925,000 tons of containerboard, an amount equal to approximately
101.1% of the amount it produced, its folding carton plants
converted 529,000 tons of SBS, recycled boxboard and coated natural
kraft, an amount equal to approximately 68.3% of the amount it
produced, and its industrial packaging plants converted 148,000
tons of recycled cylinderboard, an amount equal to approximately
77.2% of the amount it produced.  The paperboard/packaging products
operations also include 14 consumer packaging plants.  The
Company's Paperboard/Packaging Products segment contributed 90.5%
of the Company's net sales in 1995.

The Company's paperboard operations are supported by its
reclamation division, which processed or brokered 4.3 million tons
of wastepaper in 1995, and by its timber division which manages
approximately one million acres of owned or leased timberland
located in close proximity to its virgin fiber mills.  

The Company's Newsprint segment includes two newsprint mills in
Oregon, which produced 620,000 tons of recycled newsprint in 1995,
and two facilities that produce Cladwood, a construction material
produced from newsprint and wood by-products.  The Company's
newsprint mills are also supported by the Company's reclamation
division.

Except for the historical information contained in this Annual
Report on Form  10-K, certain matters discussed herein, including
(without limitation) in particular under Part I, Item 3, "Legal
Proceedings" and under Part II, Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations," are
forward looking statements.  The matters referred to in such
statements could be affected by the risks and uncertainties
involved in the Company's business, including (without limitation)
the effect of economic and market conditions, the level and
volatility of interest rates and currency values, wastepaper
prices, costs related to environmental matters, and the impact of
current or pending legislation and regulation.
<PAGE>
PRODUCTS

PAPERBOARD/PACKAGING PRODUCTS SEGMENT

CONTAINERBOARD AND CORRUGATED SHIPPING CONTAINERS
The Company's containerboard operations are highly integrated. 
Tons of containerboard produced and converted for the last three
years were:

                                              1993       1994      1995
                                                 (Tons in thousands)   
  Containerboard
     Production                              1,840      1,932      1,905
     Consumption                             1,942      2,018      1,925

The Company's mills produce a full line of containerboard,
including unbleached kraft linerboard, mottled white linerboard and
recycled medium.  Unbleached kraft linerboard is produced at the
Company's mills located in Fernandina Beach and Jacksonville,
Florida and mottled white linerboard is produced at its Brewton,
Alabama mill.  Recycled medium is produced at the Company's mills
located in Alton, Illinois, Carthage, Indiana, Circleville, Ohio
and Los Angeles, California.  In 1995, the Company produced
1,057,000, 316,000 and 532,000 tons of unbleached kraft linerboard,
mottled white linerboard and recycled medium, respectively.  The
Company's sales of containerboard in 1995 were $1,054 million
(including $559 million of intracompany sales).  Sales of
containerboard to the Company's container plants are at market
prices. 

Corrugated shipping containers, manufactured from containerboard in
converting plants, are used to ship such diverse products as home
appliances, electric motors, small machinery, grocery products,
produce, books, tobacco and furniture, and for many other
applications, including point of purchase displays.  The Company
stresses the value added aspects of its corrugated containers, such
as labeling and multi-color graphics, to differentiate its products
and respond to customer requirements.  The Company's 51 container
plants serve local customers and large national accounts and are
located nationwide, generally in or near large metropolitan areas. 
The Company's total sales of corrugated shipping containers in 1995
were $1,570 million (including $109 million of intracompany sales). 
Total corrugated shipping container sales volumes for 1993, 1994
and 1995 were 29,394, 30,822 and 29,382 million square feet,
respectively.

RECYCLED BOXBOARD, SBS AND FOLDING CARTONS
The Company's recycled boxboard, SBS and folding carton operations
are also integrated.  Tons of recycled boxboard and SBS produced
and converted for the last three years were:

                                                 1993       1994       1995
                                                     (Tons in thousands)  
  Recycled Boxboard and SBS 
     Production                                   744        767        773
     Consumption                                  542        543        529
<PAGE>
The Company's mills produce recycled coated and uncoated boxboard
and SBS.  Coated recycled boxboard is produced at the Company's
mills located in Middletown, Ohio, Philadelphia, Pennsylvania,
Santa Clara, California and Wabash, Indiana.  The Company produces
uncoated recycled boxboard at its Los Angeles, California mill and
SBS at its Brewton, Alabama mill.  The table above excludes
production of approximately 85,000 tons in 1993 from the Lockland,
Ohio boxboard mill that was closed in January 1994.  In 1995, the
Company produced 595,000 and 178,000 tons of recycled boxboard and
SBS respectively.  The Company's total sales of recycled boxboard
and SBS in 1995 were $461 million (including $231 million of
intracompany sales).

The Company's folding carton plants offer a broad range of
converting capabilities, including web and sheet litho, rotogravure
and flexo printing and a full line of structural and design
graphics services.  The Company's 18 facilities convert recycled
boxboard and SBS into folding cartons.  Folding cartons are used
primarily to protect customers' products while providing point of
purchase advertising.  The Company makes folding cartons for a wide
variety of applications, including food and fast foods, detergents,
paper products, beverages, health and beauty aids and other
consumer products.  Customers range from small local accounts to
large national and multinational accounts.  The Company's folding
carton plants are located nationwide, generally in or near large
metropolitan areas.  The Company's sales of folding cartons in 1995
were $686 million (none of which were intracompany sales).  Folding
carton sales volumes for 1993, 1994 and 1995 were 475,000, 486,000
and 469,000 tons, respectively.

The Company has focused its capital expenditures in these
operations and its marketing activities to support a strategy of
enhancing product quality as it relates to packaging graphics,
increasing flexibility while reducing customer lead time and
assisting customers in innovative package designs.

The Company provides marketing consultation and research activities
through its Design and Market Research (DMR) center.  It provides
customers with graphic and product design tailored to the specific
technical requirements of lithographic, rotogravure and
flexographic printing, as well as photography for packaging, sales
promotion concepts, and point of purchase displays.


RECYCLED CYLINDERBOARD AND INDUSTRIAL PACKAGING
The Company's recycled cylinderboard and industrial packaging
operations are also integrated.  Tons of recycled cylinderboard
produced and converted for the last three years were:

                                                  1993       1994       1995
                                                      (Tons in thousands)  
  Recycled Cylinderboard
     Production                                    157        166        164
     Consumption                                   123        128        148

The Company's recycled cylinderboard mills are located in Tacoma,
Washington, Monroe, Michigan, Lafayette, Indiana, and Cedartown,
Georgia.  The table above excludes production of approximately
49,000, 43,000 and 28,000 tons in 1993, 1994 and 1995 from a
cylinderboard mill located in Monroe, Michigan that was closed in
September 1995.  In 1995, total sales of recycled cylinderboard
were $80 million (including $34 million of intracompany sales).  
<PAGE>
The Company's 22 industrial packaging plants convert recycled
cylinderboard, including a portion of the recycled cylinderboard
produced by the Company, into papertubes and cores.  Papertubes and
cores are used primarily for paper, film and foil, yarn carriers
and other textile products and furniture components.  The Company
also produces solid fiber partitions for the pharmaceutical,
electronics, glass, cosmetics and plastics industries.  In
addition, the Company produces a patented self-locking partition
especially suited for automated packaging and product protection. 
Also, the Company manufactures corrugated pallets that are made
entirely from corrugated components and are lightweight yet
extremely strong and are fully recyclable.  The Company's
industrial packaging sales in 1995 were $114 million (including $5
million in intracompany sales).

CONSUMER PACKAGING
The Company manufactures a wide variety of products at its 14
consumer products facilities.  These products include flexible
packaging, paper and metallized paper labels and labels that are
heat transferred to plastic containers for a wide range of
industrial and consumer product applications.  The contract
packaging plants provide a wide variety of custom contract
packaging services including cartoning, bagging, liquid- or powder-
filling and high-speed overwrapping.  Fragranced advertising
products and related specialty items are produced by the scented
products facility.  The Company produces high-quality rotogravure
cylinders and has a full-service organization experienced in the
production of color separations and lithographic film for the
commercial printing, advertising and packaging industries.  Total
sales of consumer packaging products and services in 1995 were $191
million (including $15 million of intracompany sales).

RECLAMATION OPERATIONS; FIBER RESOURCES AND TIMBER PRODUCTS
The raw materials essential to the Company's business are reclaimed
fiber and virgin wood fiber.  The Brewton, Circleville,
Jacksonville and Fernandina mills use primarily wood fibers, while
the other paperboard mills use reclaimed fiber exclusively.  The
newsprint mills use approximately 47% wood fiber and 53% reclaimed
fiber.

The use of recycled products in the Company's operations begins
with its reclamation division which operates 27 facilities that
collect, sort, grade and bale wastepaper, as well as collect
aluminum and glass.  The reclamation division also operates a
nationwide brokerage system whereby it purchases and resells
wastepaper (including wastepaper for use in its recycled fiber
mills)  on a regional and national contract basis.  Such contracts
provide bulk purchasing, resulting in lower prices and cleaner
wastepaper.  The reclamation division provides valuable fiber
resources to both the paperboard and newsprint segments of the
Company as well as to other producers.  Many of the reclamation
facilities are located in close proximity to the Company's recycled
paperboard and newsprint mills, assuring availability of supply,
when needed, with minimal shipping costs.  Total sales of recycled
materials in 1995 were $736 million (including $292 million of
intracompany sales). 
<PAGE>
In 1995, the Company processed 4.3 million tons of wastepaper.  The
amount of wastepaper collected and the proportions sold internally
and externally by the Company's reclamation division for the last
three years were:

                                                  1993       1994       1995
                                                       (Tons in thousands)

  Wastepaper collected by Reclamation Division   3,907       4,134     4,293
     Percent sold internally                      48.8%       45.5%     43.1%
     Percent sold to third parties                51.2%       54.5%     56.9%



While there has been unprecedented demand for reclaimed fiber
during 1994 and 1995, the Company does not, however, anticipate any
significant problems satisfying its need for this material in the
foreseeable future.  During 1995, the wastepaper which was
reclaimed by the Company's reclamation plants and brokerage
operations satisfied all of the Company's mill requirements for
reclaimed fiber.

The Company's timber division manages approximately one million
acres of owned and leased timberland.  In 1995, approximately 59%
of the timber harvested by the Company was used in its
Jacksonville, Fernandina and Brewton Mills.  The Company harvested
893,000 cords of timber which would satisfy approximately 35% of
the Company's requirements for wood fibers.  The Company's wood
fiber requirements not satisfied internally are purchased on the
open market or under long-term contracts.  In the past, the Company
has not experienced difficulty obtaining an adequate supply of wood
through its own operations or open market purchases.  The Company
is not aware of any circumstances that would adversely affect its
ability to satisfy its wood requirements in the foreseeable future. 
In recent years, a shortage of wood fiber in the spotted owl
regions in the Northwest has resulted in increases in the cost of
virgin wood fiber.  In 1995, the Company's total sales of timber
products were $260 million (including $201 million of intracompany
sales).

NEWSPRINT SEGMENT

NEWSPRINT MILLS
The Company's newsprint mills are located in Newberg and Oregon
City, Oregon.  During 1993, 1994 and 1995, the Company produced
615,000, 615,000 and 620,000 tons of newsprint, respectively.  In
1995, total sales of newsprint were $361 million (none of which
were intracompany sales).

For the past three years, an average of approximately 55% of the
Company's newsprint production has been sold to The Times Mirror
Company ("Times Mirror") pursuant to a long-term newsprint
agreement (the "Newsprint Agreement") entered into in connection
with the Company's acquisition of Smurfit Newsprint Corporation
("SNC") stock in February 1986.  Under the terms of the Newsprint
Agreement, the Company supplies newsprint to Times Mirror generally
at prevailing West Coast market prices.  Sales of newsprint to
Times Mirror in 1995 amounted to $189 million.

CLADWOOD
Cladwood is a wood composite panel used by the housing industry,
manufactured from  sawmill  shavings  and  other  wood residuals 
and overlaid  with  recycled newsprint.  The Company has two
Cladwood plants located in Oregon.  Total sales for Cladwood in
1995 were $26 million (none of which were intracompany sales).
<PAGE>
MARKETING

The marketing strategy for the Company's mills is to maximize sales
of products to manufacturers located within an economical shipping
area.  The strategy in the converting plants focuses on both
specialty products tailored to fit customers' needs and high volume
sales of commodity products.  The Company also seeks to broaden the
customer base for each of its segments rather than to concentrate
on only a few accounts for each plant.  These objectives have led
to decentralization of marketing efforts, such that each plant has
its own sales force, and many have product design engineers, who
are in close contact with customers to respond to their specific
needs.  National sales offices are also maintained for customers
who purchase through a centralized purchasing office.  National
account business may be allocated to more than one plant because of
production capacity and equipment requirements.

COMPETITION

The paperboard and packaging products markets as well as the
newsprint markets are highly competitive and are comprised of many
participants.  Although no single company is dominant, the Company
does face significant competitors in each of its businesses.  The
Company's competitors include large vertically integrated companies
as well as numerous smaller companies.  The industries in which the
Company competes are particularly sensitive to price fluctuations
as well as other competitive factors including design, quality and
service, with varying emphasis on these factors depending on
product line.

BACKLOG

Demand for the Company's major product lines is relatively constant
throughout the year and seasonal fluctuations in marketing,
production, shipments and inventories are not significant.  The
Company does not have a significant backlog of orders, as most
orders are placed for delivery within 30 days.

RESEARCH AND DEVELOPMENT

The Company's research and development center uses state-of-the-art
technology to assist all levels of the manufacturing and sales
process from raw materials supply through finished packaging
performance.  Research programs have provided improvements in
coatings and barriers, stiffeners, inks and printing.  The
technical staff conducts basic, applied and diagnostic research,
develops processes and products and provides a wide range of other
technical services.

The Company actively pursues applications for patents on new
inventions and designs and attempts to protect its patents against
infringement.  Nevertheless, the Company believes that its success
and growth are dependent on the quality of its products and its
relationships with its customers, rather than on the extent of its
patent protection.  The Company holds or is licensed to use certain
patents, but does not consider that the successful continuation of
any important phase of its business is dependent upon such patents.
<PAGE>
EMPLOYEES

The Company had approximately 16,200 employees at December 31,
1995, of which approximately 10,900 employees (67%), are
represented by collective bargaining units.  The expiration date of
union contracts for the Company's major facilities are as follows: 
 the Oregon City mill, expiring March 1997; the Brewton mill,
expiring October 1997; the Fernandina mill, expiring June 1998; a
group of 11 properties, including 4 paper mills and 7 corrugated
container plants, expiring June 1998;  the Jacksonville mill,
expiring June 1999; the Alton mill, expiring June 2000 and the
Newberg mill, expiring March 2002. The Company believes that its
employee relations are generally good and is currently in the
process of bargaining with unions representing production employees
at a number of its other operations.

ITEM 2.  PROPERTIES

The Company's properties at December 31, 1995 are summarized in the
table below.  Approximately 58% of the Company's investment in
property, plant and equipment is represented by its paperboard and
newsprint mills.
<TABLE>
                                                               Number
                                                                 of            State
                                                             Facilities      Locations

<S>                                                               <C>              <C>
Paperboard mills:
  Containerboard mills                                             7                6
  Boxboard mills                                                   4                4
  Cylinderboard mills                                              4                4
Newsprint mills                                                    2                1
Reclamation plants                                                27               12
Converting facilities:
  Corrugated container plants                                     51               21
  Folding carton plants                                           18               10
  Industrial packaging plants                                     22               14
Consumer packaging plants                                         14                8
Cladwood plants                                                   2                1
Wood product plants                                                1                1
     Total                                                       152               28
</TABLE>
In addition to its manufacturing facilities, the Company owns and
leases approximately 758,000 acres and 226,000 acres of timberland,
respectively, and also operates wood harvesting facilities.

ITEM 3.  LEGAL PROCEEDINGS

Litigation 
In June 1993, the Company filed suit against Otis B. Ingram, as
executor of the estate of Naomi M. Ingram, and Ingram-LeGrand
Lumber Company in the United States District Court, Middle District
of Georgia, seeking declaratory and injunctive relief and damages
in excess of $3 million arising out of the defendants' alleged
breach and anticipatory repudiation of certain timber purchase
agreements and timber management agreements between the Company and
such parties dated November 22, 1967 pertaining to approximately
30,000 acres of property in Georgia (the "Agreements").  The
defendants filed an answer and counterclaim seeking damages in
excess of $14 million based on allegations that the Company
breached the Agreements and failed to pay for timber allegedly
stolen or otherwise removed from the property by the Company or
third parties.  A jury trial commenced in October 1995 and the case
was subsequently settled before completion of the trial.
<PAGE>
The Company is a defendant in a number of other lawsuits which have
arisen in the normal course of business.  While any litigation has
an element of uncertainty, the management of the Company believes
that the outcome of such suits will not have a material adverse
effect on its financial condition or results of operations.

Environmental Matters

Federal, state and local environmental requirements, particularly
relating to air and water quality, are a significant factor in the
Company's business.  The Company employs processes in the
manufacture of pulp, paperboard and other products, resulting in
various discharges and emissions that are subject to numerous
federal, state and local environmental control statutes,
regulations and ordinances.  The Company operates and expects to
operate under permits and similar authorizations from various
governmental authorities that regulate such discharges and
emissions.

Occasional violations of permit terms have occurred from time to
time at the Company's facilities, resulting in administrative
actions, legal proceedings or consent decrees and similar
arrangements.  Pending proceedings include the following:

  Sweet Home, Oregon
  On May 11, 1995, the United States Environmental Protection Agency
  ("EPA") executed a search warrant at the Sweet Home, Oregon
  manufacturing facility of SNC, at which Cladwood, a wood composite
  panel manufactured from sawmill shavings, is produced.  According
  to the search warrant, the U.S. Attorney's office for the District
  of Oregon and the EPA are investigating whether this facility
  violated the Clean Water Act or other federal laws in connection
  with its waste water discharges.  The Company has been advised
  that the government has presented, or intends to present, evidence
  to a grand jury in connection with the investigation.  SNC and
  certain of its employees could be charged, and SNC could be
  assessed significant fines and penalties if an indictment and
  conviction follows as a result of the grand jury proceeding.

  Duval County, Florida
  In March 1992, the Company entered into an administrative consent
  order with the Florida Department of Environmental Regulation to
  carry out any necessary assessment and remediation of Company-
  owned property in Duval County, Florida that was formerly the site
  of a sawmill that dipped lumber into a chemical solution. 
  Assessment data with respect to this site indicates soil and
  groundwater contamination that will likely require nonroutine
  remediation.  Management believes that the probable costs of this
  site, taken alone or with potential costs at other Company-owned
  properties where some contamination has been found, will not have
  a material adverse effect on its financial condition or results
  of operations.
<PAGE>
  Jacksonville, Florida
  In October 1994, the Company voluntarily reported possible
  noncompliance with certain provisions of its
  construction/operation permit at its D-Graphics labels plant
  located in Jacksonville, Florida to state and local environmental
  authorities, and subsequently entered into a settlement agreement
  with such authorities to resolve all civil and administrative
  issues regarding this matter.  The Company has recently been
  advised by the United States Department of Justice that it will
  not pursue any criminal action against the Company in connection
  with this matter.

The Company also faces potential liability as a result of releases,
or threatened releases, of hazardous substances into the
environment from various sites owned and operated by third parties
at which Company-generated wastes have allegedly been deposited. 
Generators of hazardous substances sent to off-site disposal
locations at which environmental problems exist, as well as the
owners of those sites and certain other classes of persons
(generally referred to as "potentially responsible parties" or
"PRPs"), are, in most instances, subject to joint and several
liability for response costs for the investigation and remediation
of such sites under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") and analogous state laws,
regardless of fault or the legality of original disposal.  The
Company has received notice that it is or may be a PRP at a number
of federal and/or state sites where remedial action may be
required, and as a result may have joint and several liability for
cleanup costs at such sites.  However, liability of CERCLA sites is
typically shared with the other PRPs and costs are commonly
allocated according to relative amounts of waste deposited. 
Because the Company's relative percentage of waste deposited at a
majority of these sites is quite small, management of the Company
believes that its probable liability under CERCLA, taken on a case
by case basis or in the aggregate, will not have a material adverse
effect on its financial condition or operations.  Pending CERCLA
proceedings include the following:

  Miami County, Ohio Site
  In 1995, pursuant to a consent decree previously entered into with
  the United States, the Company paid $3.1 million in satisfaction
  of its alleged and/or potential liability for past and future
  response costs under CERCLA in connection with a site in Miami
  County, Ohio and, pursuant to a second consent decree with the
  United States, paid $1.2 million in settlement of a cause of
  action previously commenced by the government against the Company
  for alleged failures to properly respond to document and
  information requests by the EPA with respect to such site.  A
  criminal inquiry was commenced in 1993 relating to the Company's
  responses to the EPA's document and information requests, and it
  is uncertain whether any criminal action will be forthcoming.

  Monterey Park, California Site
  The Company has paid approximately $768,000 pursuant to two
  partial consent decrees entered into in 1990 and 1991 with respect
  to cleanup obligations at the Operating Industries site in
  Monterey Park, California.  It is anticipated that there will be
  further remedial measures beyond those covered by these partial
  settlements.

  Baltimore, Maryland Site
  The Company entered into a consent decree and settlement agreement
  in full settlement of its obligations in connection with a
  superfund site in Baltimore, Maryland.  The Company paid
  approximately $171,000 in 1995 as part of this settlement, and may
  be required to pay an additional amount up to approximately
  $80,000 for future cleanup costs.
<PAGE>
In addition to other Federal and State laws regarding hazardous
substance contamination at sites owned or operated by the Company,
the New Jersey Industrial Site Recovery Act ("ISRA") requires that
a "Negative Declaration" or a "Cleanup Plan" be filed and approved
by the New Jersey Department of Environmental Protection and Energy
("DEPE") as a precondition to the "transfer" of an "industrial
establishment".  The ISRA regulations provide that a transferor may
close a transaction prior to the DEPE's approval of a negative
declaration if the transferor enters into an administrative consent
order with the DEPE.  The Company is currently a signatory to
administrative consent orders with respect to two formerly leased
or owned industrial establishments and to a facility that was sold
in 1995 and received a negative declaration with respect thereto. 
Management believes that any requirements that may be imposed by
the DEPE with respect to these sites will not have a materially
adverse effect on the financial condition or results of operations
of the Company.

The Company's paperboard and newsprint mills are large consumers of
energy, using either natural gas or coal.  Approximately 68% of the
Company's total paperboard tonnage is produced by mills which have
coal-fired boilers.  The cost of energy is dependent, in part, on
environmental regulations concerning sulfur dioxide and particulate
emissions.

Because various pollution control standards are subject to change,
it is not possible at this time to predict the amount of capital
expenditures that will ultimately be required to comply with future
standards.  In particular, the EPA has proposed a comprehensive
rule governing the pulp, paper and paperboard industry, which could
require substantial expenditures to achieve compliance on the part
of the Company.  For the past three years, the Company has spent an
average of approximately $10 million annually on capital
expenditures for environmental purposes.  Further sums may be
required in the future, although, in the opinion of management,
such expenditures will not have a material effect on its financial
condition or results of operations.  The anticipated spending for
such capital projects for fiscal 1996 is approximately $30 million. 
Since the Company's competitors are, or will be, subject to
comparable pollution control standards, including the proposed rule
discussed above, if implemented, management is of the opinion that compliance
with future pollution standards will not adversely affect the Company's
competitive position. 
<PAGE>
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders of the
registrant during the fourth quarter of 1995.



                                        PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND
         RELATED STOCKHOLDER MATTERS

MARKET INFORMATION
The Company is a wholly-owned subsidiary of JSC, and therefore, all
of the outstanding common stock of the Company ("JSCE Common
Stock") is owned by JSC.  As a result, there is no established
public market for the JSCE Common Stock.

DIVIDENDS
The Company has not paid cash dividends on its common stock.  The
ability of the Company to pay dividends in the future is restricted
by certain provisions contained in the 1994 Credit Agreement (as
defined) and the indentures relating to the outstanding
indebtedness of JSC (U.S.) which the Company guarantees.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
(In millions, except statistical data)                                                              
                                            1995        1994         1993         1992        1991  
<S>                                        <C>         <C>          <C>          <C>         <C>
Summary of Operations
Net sales                                  $4,093      $3,233       $2,947       $2,998      $2,940 
Cost of goods sold                          3,222       2,719        2,567        2,495       2,407 
Gross profit                                  871         514          380          503         533 
Selling and administrative expenses           241         223          239          231         225 
Restructuring charge                                                    96 
Environmental and other charges                                         54                          
Income (loss) from operations                 630         291           (9)         272         308 
Interest expense                             (234)       (269)        (254)        (300)       (335)
Other, net <fn1>                                7           6            5            4         (40)
Income (loss) before income taxes, 
   extraordinary item and cumulative
   effect of accounting changes               403          28         (258)         (24)        (67)
Provision for (benefit from) 
   income taxes                               156          16          (83)          10          10 
Income (loss) before                              
   extraordinary item and cumulative
   effect of accounting changes               247          12         (175)         (34)        (77)
Extraordinary item
   Loss from early extinguishment 
     of debt, net of income tax benefit        (4)        (55)         (38)         (50)
Cumulative effect of accounting
   changes                                                             (16)                         

Net income (loss)                          $  243      $  (43)      $ (229)      $  (84)     $  (77)

                                                                                                    
                                                                                       
Other Financial Data
Net cash provided by operating 
   activities                              $  411      $  149       $   78       $  146      $  133 
Depreciation, depletion and 
   amortization                               139         131          131          135         130 
Capital investments and acquisitions          188         166          117          104         129 
Working capital                                47          11           40          106          77 
Property, plant, equipment and
   timberland, net                          1,714       1,686        1,636        1,497       1,526 
Total assets                                2,783       2,759        2,597        2,436       2,460 
Long-term debt, less current
   maturities                               2,111       2,392        2,619        2,503       2,650 
Deferred income tax liability                 328         208          232          160         158 
Stockholder's deficit                        (487)       (730)      (1,058)        (829)       (977)

Statistical Data (tons in thousands)
Containerboard production (tons)             1,905       1,932        1,840        1,918       1,830
Boxboard and SBS production (tons)             774         767          744          745         726
Newsprint production (tons)                    620         615          615          615         614
Corrugated shipments (billion sq. ft.)        29.4        30.8         29.4         28.1        26.4
Folding carton shipments (tons)                469         486          475          487         482
Fiber reclaimed and brokered (tons)          4,293       4,134        3,907        3,846       3,666
Timberland owned or leased
  (thousand acres)                             984         985          984          978         978
Number of employees                         16,200      16,600       17,300       17,800      18,100
                                                                                          



<FN>
<fn1> Other, net in 1991 includes after-tax charges of $29 million
      and $7 million for the write-off of the Company's equity
      investments in Temboard and Company Limited Partnership, Inc.
      and PCL Industries Limited, respectively. 
</FN>
</TABLE>
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL        
         CONDITION AND RESULTS OF OPERATIONS

General
Market conditions and demand for containerboard, corrugated
shipping containers and newsprint, three of the Company's most
important products, are generally subject to cyclical changes in
the economy and changes in industry capacity, both of which can
significantly impact selling prices and the Company's
profitability.  
Containerboard markets, which were depressed in the early 1990's,
began to recover in late 1993 and the strong growth in the U.S.
economy in the second half of 1994 and the first half of 1995
propelled containerboard prices through a series of rapid
increases.  Linerboard prices in 1993 were at a low of $280/ton
prior to the recovery and, by April of 1995, had reached a record
high of $535/ton.  Market conditions were strong until the third
quarter of 1995, when the economy began to weaken, causing excess
inventories in the industry.  Many paper companies, including the
Company, took downtime at paper mills during the fourth quarter of
1995 in response to the slowdown in the economy.  Linerboard prices
softened by the end of 1995 to $490/ton, but were still high
compared to historical levels.  

Newsprint markets were also depressed in the early 1990's.  Demand
for newsprint  began to improve in the second half of 1994 and
prices steadily increased during the second half of 1994 and 1995.

Increases in demand for recycled paperboard products and recycled
newsprint during 1994 and 1995 created unprecedented demand for
reclaimed fiber, causing shortages of this material and prices
escalated at a dramatic rate.  While the effect of the reclaimed
fiber price increases is favorable to the Company's reclamation
products division, it is unfavorable to the Company overall because
reclaimed fiber is a key raw material for certain of its paper
mills.  The demand for and price of reclaimed fiber dropped
dramatically in the fourth quarter of 1995 as a result of the
significant downtime taken by containerboard mills throughout the
country.  Although reclaimed fiber prices are currently low in
comparison to the record highs reached earlier in 1995, the Company
believes it is likely that the cost of reclaimed fiber will
increase again in 1996.  The Company does not, however, anticipate
any significant problems satisfying its need for this material in
the foreseeable future.
<TABLE>
Results of Operations

Segment data
(In millions)                 1995                1994                  1993       
                                                      Income                 Income
                                  Income              (loss)                 (loss)
                     Net           from       Net     from         Net       from
                    sales       operations   sales  operations    sales   operations  
<S>                  <C>           <C>       <C>          <C>        <C>         <C>
Paperboard/
  Packaging 
  Products           $3,706        $604      $2,974       $308       $2,699      $ 13 
Newsprint               387          26         259        (17)         248       (22)

Total                $4,093        $630      $3,233       $291       $2,947      $ (9)
</TABLE>
<PAGE>


1995 Compared to 1994
Price recovery coupled with productivity gains and cost reduction
programs implemented in recent years provided record sales and
earnings for the Company in 1995.  Net sales were $4.1 billion, an
increase of 26.6% over 1994 and income from operations was $630
million, more than double the 1994 amount.  Increases (decreases)
in sales for each of the Company's segments are discussed below.
<TABLE>
(In millions)                                           1995 Compared to 1994     
                                              Paperboard/
                                               Packaging
                                               Products       Newsprint     Total 
<S>                                               <C>            <C>         <C>
Increase (decrease) due to:
  Sales prices and product mix                    $749           $130        $879 
  Sales volume                                     (22)            (2)        (24)
  Acquisitions and new facilities                    9                          9 
  Sold or closed facilities                         (4)                        (4)
Total net sales increase                          $732           $128        $860 
</TABLE>
Paperboard/Packaging Products Segment Sales
Net sales of the Paperboard/Packaging Products segment increased
24.6% compared to 1994, to $3.71 billion, primarily as a result of
sales prices and product mix.                                     
                         
Net sales of containerboard and corrugated shipping containers
increased 25.9% compared to 1994, to $1.96 billion.  Corrugated
shipping container prices increased 28.0% on average compared to
1994.  In view of the reduced demand in the second half of 1995,
several of the Company's containerboard mills took downtime in
order to reduce inventories.  As a result of this downtime,
shipments of containerboard in 1995 were down 2.0% compared to
1994.  Shipments of corrugated shipping containers were down 4.2%
compared to 1994.

Net sales of recycled boxboard, SBS and folding cartons increased
9.6% compared to 1994, to $916 million.  Recycled boxboard prices
were increased during the first half of 1995 to cover higher
reclaimed fiber cost, but declined later in the year in response to
lower reclaimed fiber cost.  On average, prices of recycled
boxboard and SBS rose 19.4% and 18.9%, respectively, compared to
1994.  Folding carton prices increased 9.4% on average compared to
1994.  Shipments of recycled boxboard and SBS decreased 2.1% and
shipments of folding cartons decreased by 2.8% compared to 1994.

Net sales for the reclamation and timber products operations
increased 74.7% compared to 1994, to $503 million, due primarily to
escalating prices of reclaimed fiber.  Reclaimed fiber prices were
higher by 62.0% on average compared to 1994 and shipments increased
4.1% compared to 1994.

Net sales of recycled cylinderboard and industrial packaging
increased 18.3% compared to 1994, to $155 million, due primarily to
higher prices.  Net sales of consumer packaging increased 6.0%
compared to 1994, to $176 million.
<PAGE>

Newsprint Segment Sales
Net sales of the Newsprint segment increased 49.4% compared to
1994, to $387 million, primarily as a result of sales prices and
product mix.  

Costs and Expenses
Cost of goods sold as a percent of net sales declined from 82.5% in
1994 to 77.6% in 1995 in the Paperboard/Packaging Products segment
and declined from 102.2% in 1994 to 89.5% in 1995 in the Newsprint
segment.  Selling and administrative expenses as a percent of net
sales declined for both segments from 6.9% in 1994 to 5.9% in 1995. 
The sales price increases implemented during 1995 were the primary
reason for the improvements in each of cost of goods sold and
selling and administrative expenses as a percent of net sales. 

In 1993, the Company recorded a pretax charge of $96 million for a
restructuring program (the "Restructuring Program") to improve its
long-term competitive position.  The Restructuring Program provided
for plant closures, asset write-downs, reductions in workforce,
relocation of employees and consolidation of certain plant
operations, expected to be completed over an approximate three year
period.  Major activities relating to the Restructuring Program in
1995 included the sale of a corrugated shipping container plant in
August and the shutdown in September of the East mill in Monroe,
Michigan, which produced approximately 50,000 tons per year of
recycled cylinderboard.  Since 1993, the Company has written down
the assets of closed facilities and other nonproductive assets
totalling $35 million and made cash expenditures of $33 million
relating to the Restructuring Program.  Proceeds of $5 million from
sale of fixed assets and asset transfers to other plants of $2
million were used to offset additional expenses and anticipated
expenses related to shutdowns.  The remaining balance of the
restructuring liability, the majority of which is for anticipated
cash expenditures in 1996, will continue to be funded through
operations.  Based on expenditures to date and those anticipated by
the original plan, no significant adjustment to the reserve balance
is expected at this time.

The Company decreased its weighted average discount rate in
measuring its pension obligations from 8.5% to 7.25% and its rate
of increase in compensation levels from 5.0% to 4.0% at December
31, 1995.  The net effect of changing these assumptions was the
primary reason for the increase in projected benefit obligations. 
In addition, the Company changed its expected long-term rate of
return on assets from 10.0% to 9.5% at December 31, 1995.  The net
effect of these changes is expected to increase pension cost in
1996 by approximately $14 million.

In the fourth quarter of 1995, the Company recorded a pretax charge
totalling $25 million related to product quality matters and
failure to follow proper manufacturing and internal procedures in
an immaterial non-core product line.  The Company is continuing to
further evaluate this issue and expects to conclude its review
during the second fiscal quarter.  Based upon the information
currently available to management, the Company believes the reserve
is adequate but intends to reevaluate the adequacy of the reserve
at the conclusion of its review.
<PAGE>
Interest expense for 1995 declined $35 million compared to 1994 due
primarily to lower average debt levels outstanding and lower
effective interest rates.  The lower average interest rate in 1995
resulted primarily from the retirement in <PAGE>
December 1994 of the
Company's high yield subordinated debt in conjunction with the
Company's 1994 Recapitalization as defined in
the JSC 1994 Annual Report on Form 10-K (the "1994
Recapitalization").

The Company will adopt Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of", in the first
quarter of 1996.  Based on current circumstances, the Company does
not believe the effect of such adoption will be material.

The provision for income taxes in 1995 was $156 million compared to
$16 million in 1994.  The Company's effective tax rate of 38.7% in
1995 was substantially lower than the 1994 effective tax rate of
57.1%, primarily due to the effect of permanent differences from
applying purchase accounting.  The Company has net operating loss
carryforwards for federal income tax purposes of approximately $98
million (expiring in the year 2009), none of which are available
for utilization against alternative minimum taxes.  Federal income
tax returns for 1989 through 1991 are currently under examination. 
While the ultimate results of such examination cannot be predicted
with certainty, the Company's management believes that the
examination will not have a material adverse effect on its
consolidated financial condition or results of operations.


1994 Compared to 1993
Results for 1994 reflected increased demand for the Company's
products.  Net sales of $3.2 billion for 1994 were up 9.7% compared
to 1993.  Increases (decreases) in sales for each of the Company's
segments are discussed below.
<TABLE>

(In millions)                                          1994 Compared to 1993     
                                               Paperboard/
                                               Packaging
                                               Products      Newsprint      Total 
<S>                                               <C>          <C>            <C> 
Increase (decrease) due to:
  Sales price and product mix                     $185         $ 11           $196 
  Sales volume                                     199                         199 
  Acquisitions and new facilities                    5                           5 
  Closed facilities                               (114)                       (114)
Total net sales increase                          $275         $ 11           $286 
</TABLE>

Paperboard/Packaging Products Segment Sales
Net sales in the Paperboard/Packaging Products segment for 1994
increased 10.2% compared to 1993, to $2.97 billion.  The increase
was due to higher sales prices and increased sales volume.  Sales
growth for this segment was mitigated by the shutdown of several
operating facilities in late 1993 and early 1994, including a
coated recycled boxboard mill, five converting plants and two
reclamation products facilities in connection with the Company's
Restructuring Program.

Net sales of containerboard and corrugated shipping containers
increased 12.5% compared to 1993, to $1.55 billion.  Containerboard
prices increased from approximately $300/ton at the end of 1993 to
$435/ton in October 1994.  Corrugated shipping container prices
increased 4.7% on average compared to 1993.  
Shipments of containerboard and corrugated shipping containers were
higher in 1994 compared to 1993 by 3.9% and 4.7%, respectively.
<PAGE>
Net sales of recycled boxboard, SBS and folding cartons decreased
2.6% compared to 1993, to $836 million.  On average, recycled
boxboard prices were comparable to 1993, but SBS prices, although
rising in the second half of 1994, were 4.8% lower on average
compared to 1993.  Folding carton prices were lower on average by
2.2% in 1994 compared to 1993.  Shipments of folding cartons
increased by 1.8% compared to 1993, but shipments of recycled
boxboard decreased 10.0%, due primarily to the recycled boxboard
mill shutdown referred to above.  Shipments of SBS increased 6.8%
compared to 1993.

Net sales for the reclamation and timber products operations
increased 74.5% compared to 1993, to $288 million, due primarily to
higher prices for reclaimed fiber.  Reclaimed fiber prices in 1994
were higher by 62.9% on average compared to 1993 and shipments
increased 5.8% compared to 1993.

Net sales of recycled cylinderboard and industrial packaging
increased .8% compared to 1993, to $131 million and net sales of
consumer packaging increased .6% compared to 1993 to $166 million.

Newsprint Segment Sales
Net sales in the Newsprint segment for 1994 increased $11 million,
up 4.4% compared to 1993, to $259 million.  The increase was due
primarily to higher sales prices in the second half of 1994.

Costs and Expenses
Costs and expenses in both segments in 1994 were favorably impacted
by cost reduction initiatives and by the Restructuring Program. 
Cost of goods sold as a percent of net sales in the
Paperboard/Packaging Products segment declined from 85.6% in 1993
to 82.5% in 1994, primarily as a result of higher sales prices and
improved capacity utilization. Cost of goods sold as a percent of
net sales in the Newsprint segment improved modestly from 102.8% in
1993 to 102.2% in 1994, primarily as a result of higher sales
prices.  Selling and administrative  expenses as a percent of net
sales declined from 8.1% in 1993 to 6.9% in 1994 as a result of
higher sales prices.

The Company increased its weighted average discount rate in
measuring its pension obligations from 7.6% to 8.5% and its rate of
increase in compensation levels from 4.0% to 5.0% at December 31,
1994.  The net effect of changing these assumptions was the primary
reason for the decrease in projected benefit obligations and the
changes decreased pension cost in 1995 by approximately $5 million.

Average debt levels outstanding decreased in 1994 as a result of
the 1994 Recapitalization, however, interest expense of $269
million for 1994 increased 5.9% compared to 1993 due to the impact
of higher effective interest rates in 1994.

The tax provision for 1994 was $16 million compared to a tax
benefit for 1993 of $83 million.  The Company's effective tax rate
for 1994 was higher than the U.S. Federal statutory tax rate due to
several factors, the most significant of which was the effect of
permanent differences between book and tax accounting.
<PAGE>
The Company recorded an extraordinary loss from the early
extinguishment of debt (net of income tax benefits) amounting to
$55 million in 1994 and $38 million in 1993.  The Company adopted
SFAS No. 112 "Employers' Accounting for Postemployment Benefits" in
1994, the effect of which was not material.

Liquidity and Capital Resources
Net cash provided by operating activities was significantly higher
in 1995 compared to 1994 due primarily to the higher earnings
level.  Net cash provided by operating activities of $411 million
and excess cash at the end of 1994 was used primarily to fund
capital investments and acquisitions of $188 million and to reduce
debt by $264 million. 

The ratio of current assets to current liabilities was 1.1 at
December 31, 1995 compared to 1.0 at December 31, 1994.  Accounts
receivable were higher at December 31, 1995, primarily as a result
of significantly higher product pricing. Accounts payable were
lower at December 31, 1995, primarily as a result of lower fiber
cost at the end of 1995 compared to 1994.

In February 1995, JSC (U.S.) entered into a $315 million accounts
receivable securitization program (the "1995 Securitization")
consisting of a $300 million trade receivables-backed commercial
paper program and a $15 million term loan, which matures in
December 1999.  Proceeds of the 1995 Securitization were used to
extinguish JSC (U.S.)'s borrowings under its previous accounts
receivable securitization program and for general corporate
purposes.  Interest rates on borrowings under the 1995
Securitization are at a variable rate (5.78% at December 31, 1995).

In conjunction with the Company's 1994 Recapitalization, the
Company entered into a new bank credit facility (the "1994 Credit
Agreement") consisting of a $450 million revolving credit facility,
a $900 million Tranche A Term Loan and a $300 million Tranche B
Term Loan.  In October 1995, the 1994 Credit Agreement was amended
to reduce the interest rates payable on the revolving credit
facility and the Tranche A Term Loan.  Net debt reduction for 1995
included $64 million of mandatory and $192 million of optional
payments in respect of the  Tranche A and Tranche B Term Loans. 
The Company recorded an extraordinary loss from the early
extinguishment of debt (net of income tax benefits) amounting to $4
million ($.04 per share) in 1995.  In January 1996, the 1994 Credit
Agreement was amended to give greater flexibility to the Company in
applying optional prepayments toward installments due within the
next twelve months.

The 1994 Credit Agreement contains various business and financial
covenants including, among other things, (i) limitations on
dividends, redemptions and repurchases of capital stock, (ii)
limitations on the incurrence of indebtedness, liens, leases and
sale-leaseback transactions, (iii) limitations on capital
expenditures, (iv) maintenance of minimum levels of consolidated
earnings before depreciation, interest, taxes and amortization and
(v) maintenance of minimum interest coverage ratios.  Such
restrictions, together with the highly leveraged position of the
Company, could restrict corporate activities, including the
Company's ability to respond to market conditions, to provide for
unanticipated capital expenditures or to take advantage of business
opportunities.
<PAGE>
The 1994 Credit Agreement imposes an annual limit on future capital
expenditures of $150 million.  The capital spending limit is
subject to  increase in any  year by an amount equal to the 
Company's portion of excess cash flow and
an amount up to $75 million if the prior year's spending was less
than the maximum amount allowed.  The Company has a carryover of
approximately $66 million for 1996.  Because the Company has
invested heavily in its core businesses in prior years, management
believes the annual limitation for capital expenditures does not
impair its plans for maintenance, expansion and continued
modernization of its facilities.

Capital investments and acquisitions in 1995 include $154 million
of property and timberland additions and $34 million of investments
in affiliates and acquisitions.  The investments in affiliates
primarily include (i) the purchase of the 20% minority interest of
Smurfit Newsprint Corporation previously owned by Times Mirror, the
primary assets of which are two mills located near Portland, Oregon
producing approximately 620,000 tons of newsprint annually, and
(ii) a joint venture, the primary asset of which is a linerboard
mill near Shanghai, China. 

The Company expects internally generated cash flows and existing
financing resources will be sufficient for the next several years
to meet its needs to pay interest, amortize term loans and fund
capital expenditures.  Scheduled payments due in 1996 and 1997
under the 1994 Credit Agreement are $62 million and $133 million,
with increasing amounts thereafter.  Capital expenditures for 1996
are estimated to be comparable to 1995.  The Company expects to use
any excess cash provided by operations to make further debt
reductions.  At December 31, 1995, the Company had $301 million of
unused borrowing capacity under its 1994 Credit Agreement and $95
million of unused borrowing capacity under the 1995 Securitization
subject to JSC (U.S.)'s level of eligible accounts receivable.

The Company's earnings are significantly affected by the amount of
interest on its indebtedness.  The Company enters into interest
rate swap, cap and option agreements to manage interest rate
exposure on its indebtedness.  Management's objective is to protect
the Company from interest rate volatility and reduce or cap
interest expense within acceptable levels of risk.  Periodic
amounts to be paid or received under interest rate swap and cap
agreements are accrued and recognized as adjustments to interest
expense.  Premiums paid on cap agreements are included in interest
payable and amortized to interest expense over the life of the
agreements. The Company amends existing agreements or enters into
agreements with offsetting effects when necessary to change its net
position.  In 1995, interest rate swap agreements with a notional
value of $925 million expired and a cap agreement with a notional
amount of $100 million was terminated.  Also in 1995, the Company
entered into an interest rate swap agreement with a notional amount
of $100 million.  The table below shows interest rate swap
agreements outstanding at December 31, 1995, the related maturities
for the years thereafter and the contracted pay and receive rates
for such agreements.
<TABLE>
                                            
                                     Interest rate
                                       swaps at                 Interest rate
                                     December 31,              swap maturities 
  (In millions)                         1995                   1996       1997    
  
  <S>                                    <C>                   <C>         <C>
  Pay fixed interest rate swaps          $  483                $(150)      $(333)
    Pay rate                              6.519%               6.519%      6.645%
    Receive rate                          5.797%
</TABLE>
<PAGE>
The Company has a cap agreement with a notional amount of $100
million, which matures in 1996, on variable rate debt which limits
the Company's interest payments to a range of 5.5-7.0% on the
notional amount.

Environmental Matters

In 1993, the Company recorded a provision of $54 million, of which
$39 million relates to environmental matters, representing asbestos
and PCB removal, solid waste cleanup at existing and former
operating sites, and expenses for response costs at various sites
where the Company has received notice that it is a potentially
responsible party ("PRP").  The Company made payments of $9 million
and $4 million related to PRP sites and other environmental cleanup
in 1995 and 1994, respectively.  The Company, as well as other
companies in the industry, faces potential environmental liability
related to various sites at which wastes have allegedly been
deposited.  The Company has received notice that it is or may be a
PRP at a number of federal and state sites (the "Sites") where
remedial action may be required.  Because the laws that govern the
cleanup of waste disposal sites have been construed to authorize
joint and several liability, government agencies or other parties
could seek to recover all response costs for any Site from any one
of the PRPs for such Site, including the Company, despite the
involvement of other PRPs.  Although the Company is unable to
estimate the aggregate response costs in connection with the
remediation of all Sites, if the Company were held jointly and
severally liable for all response costs at some or all of the
Sites, it would have a material adverse effect on the financial
condition and results of operations of the Company.  However, joint
and several liability generally has not in the past been imposed on
PRPs, and, based on such past practice, the Company's past
experience and the financial conditions of other PRPs with respect
to the Sites, the Company does not expect to be held jointly and
severally liable for all response costs at any Site.  Liability at
waste disposal sites is typically shared with other PRPs and costs
generally are allocated according to relative volumes of waste
deposited.  At most Sites, the waste attributed to the Company is
a very small portion of the total waste deposited at the Site
(generally significantly less than 1%).  There are approximately
ten Sites where final settlement has not been reached and where the
Company's potential liability is expected to exceed de minimis
levels.  Accordingly, the Company believes that its estimated total
probable liability for response costs at the Sites was adequately
reserved at December 31, 1995.  Further, the estimate takes into
consideration the number of other PRPs at each site, the identity,
and financial position of such parties, in light of the joint and
several nature of the liability, but does not take into account
possible insurance coverage or other similar reimbursement.

Effects of Inflation

With the exception of recycled fiber, the moderate level of
inflation during the past few years has not had a material impact
on the Company's financial position or operating results.  The
Company uses the last-in, first-out method of accounting for
approximately 80% of its inventories.  Under this method, the cost
of products sold reported in the financial statements approximates
current cost and thus reduces the distortion in reported income due
to increasing costs.

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                 Page No.

The following consolidated financial statements of JSCE, Inc. are
included in this report:
  
     Consolidated balance sheets - December 31, 1995 and 1994. . . . . . 25
     For the years ended December 31, 1995, 1994 and 1993:
        Consolidated statements of operations. . . . . . . . . . . . . . 26
        Consolidated statements of stockholder's deficit . . . . . . . . 27
        Consolidated statements of cash flows. . . . . . . . . . . . . . 28
     Notes to consolidated financial statements. . . . . . . . . . . . . 29

The following consolidated financial statement schedule of JSCE,
Inc. is included in Item 14 (a):

        II:  Valuation and Qualifying Accounts . . . . . . . . . . . . . 55

All other schedules specified under Regulation S-X for JSCE, Inc.
have been omitted because they are either not applicable, not
required or because the information required is included in the
financial statements or notes thereto.

<PAGE>

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS 

The management of the Company is responsible for the information
contained in the consolidated financial statements and in other
parts of this report.  The consolidated financial statements have
been prepared by the Company in accordance with generally accepted
accounting principles appropriate in the circumstances, and
necessarily include certain amounts based on management's best
estimate and judgment.

The Company maintains a system of internal accounting control,
which it believes is sufficient to provide reasonable assurance
that in all material respects transactions are properly authorized
and recorded, financial reporting responsibilities are met and
accountability for assets is maintained.  In establishing and
maintaining any system of internal control, judgment is required to
assess and balance the relative costs and expected benefits. 
Management believes that through the careful selection of
employees, the division of responsibilities and the application of
formal policies and procedures, the Company has an effective and
responsive system of internal accounting controls.  The system is
monitored by the Company's staff of internal auditors, who evaluate
and report to management on the effectiveness of the system.

The Audit Committee of the Board of Directors is composed of three
directors who meet with the independent auditors, internal auditors
and management to discuss specific accounting, reporting and
internal control matters.  Both the independent auditors and
internal auditors have full and free access to the Audit Committee.


James E. Terrill
President, Chief Executive Officer


John R. Funke
Vice President and Chief Financial Officer
(Principal Accounting Officer)
<PAGE>

                            REPORT OF INDEPENDENT AUDITORS



Board of Directors
JSCE, Inc.




We have audited the accompanying consolidated balance sheets of
JSCE, Inc. as of December 31, 1995 and 1994, and the related
consolidated statements of operations, stockholder's deficit and
cash flows for each of the three years in the period ended December
31, 1995.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of JSCE, Inc. at December 31, 1995 and 1994, and the
consolidated results of its operations and its cash flows for each
of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles.

As discussed in Note 5 and Note 6 to the financial statements, in
1993, the Company changed its method of accounting for income taxes
and postretirement benefits.


                                                           Ernst & Young LLP


St. Louis, Missouri
January 24, 1996


<PAGE>
<TABLE>
                                          JSCE, Inc.
                                  CONSOLIDATED BALANCE SHEETS
                               (In millions, except share data)


December 31,                                                   1995               1994

          ASSETS
<S>                                                          <C>                <C>
Current assets
  Cash and cash equivalents                                  $    27            $    62
  Receivables, less allowances of 
    $9 in 1995 and 1994                                          339                316
  Inventories
    Work-in-process and finished goods                            85                 87Materials
and supplies                                                     139                137
                                                                 224                224
  Deferred income taxes                                           45                 38
  Prepaid expenses and other current assets                        9                  7
          Total current assets                                   644                647

Net property, plant and equipment                              1,456              1,427

Timberland, less timber depletion                                258                259

Goodwill, less accumulated amortization of
  $42 in 1995 and $35 in 1994                                    253                257
Other assets                                                     172                169
                                                             $ 2,783            $ 2,759

LIABILITIES AND STOCKHOLDER'S DEFICIT 
Current liabilities
  Current maturities of long-term debt                       $    81            $    50
  Accounts payable                                               290                349
  Accrued compensation and payroll taxes                         101                114
  Interest payable                                                37                 48
  Other accrued liabilities                                       88                 75
          Total current liabilities                              597                636

Long-term debt, less current maturities                        2,111              2,392

Other long-term liabilities                                      234                253

Deferred income taxes                                            328                208

Stockholder's deficit
  Common stock, par value $.01 per share;
    1,000 shares authorized and outstanding
  Additional paid-in capital                                   1,102              1,102
  Retained earnings (deficit)                                 (1,589)            (1,832)
       Total stockholder's deficit                              (487)              (730)
                                                             $ 2,783            $ 2,759
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
                                             JSCE, Inc.
                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                            (In millions)


Year Ended December 31,                                    1995             1994            1993   


<S>                                                        <C>              <C>              <C>
Net sales                                                  $4,093           $3,233           $2,947
Costs and expenses                                               
  Cost of goods sold                                        3,222            2,719            2,567
  Selling and administrative expenses                         241              223              239
  Restructuring charge                                                                           96
  Environmental and other charges                                                                54
                                                                 
     Income (loss) from operations                            630              291               (9)
                                                                 
Other income (expense)                                           
  Interest expense                                           (234)            (269)            (254)
  Other, net                                                    7                6                5
                                                                 
     Income (loss) before income taxes,                          
        extraordinary item and cumulative                        
        effect of accounting changes                          403               28             (258)
                                                                 
Provision for (benefit from) income taxes                     156               16              (83)
                                                                 
     Income (loss) before extraordinary item and                 
       cumulative effect of accounting changes                247               12             (175)
                                                                 
Extraordinary item                                               
  Loss from early extinguishment of debt,                        
     net of income tax benefit of $2 in 1995,                    
     $34 in 1994, and $22 in 1993                              (4)             (55)             (38)
                                                                 
Cumulative effect of accounting changes                          
  Postretirement benefits, net of income tax                     
    benefit of $22                                                                              (37)
  Income taxes                                                                                   21
                                                                 
     Net income (loss)                                     $  243           $  (43)          $ (229)


</TABLE>



See notes to consolidated financial statements.
<PAGE>
<TABLE>
                                             JSCE, Inc.
                          CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT
                                  (In millions, except share data)





                                          Common Stock  
                                       Par        Number      Additional      Retained
                                      Value           of        Paid-In       Earnings
                                       $.01       Shares        Capital       (Deficit)

<S>                                    <C>         <C>            <C>          <C>
Balance at January 1, 1993             $           1,000          $  732       $(1,560) 

Net loss                                                                          (229) 
                                                                                      

Balance at December 31, 1993                       1,000             732        (1,789)

Net loss                                                                           (43)

Capital contribution, 
    net of related expenses                                          370
                                                                                      

Balance at December 31, 1994                       1,000           1,102        (1,832)

Net income                                                                         243
                                                                                      

Balance at December 31, 1995           $           1,000          $1,102       $(1,589)

</TABLE>


See notes to consolidated financial statements.
<PAGE>
<TABLE>
                                             JSCE, Inc.
                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            (In millions)


Year Ended December 31,                                         1995           1994        1993    

                                                                             
<S>                                                              <C>           <C>            <C>
Cash flows from operating activities
    Net income (loss)                                            $ 243         $  (43)        $(229)
    Adjustments to reconcile net income (loss) to net                 
    cash provided by operating activities                             
       Extraordinary loss from early                                  
          extinguishment of debt                                     7             89            60
       Cumulative effect of accounting changes
          Postretirement benefits                                                                59
          Income taxes                                                                          (21)
       Restructuring charge                                                                      96
       Environmental and other charges                                                           54
       Depreciation, depletion and amortization                    139            131           131
       Amortization of deferred debt issuance costs                 14             10             8
       Deferred income taxes                                       113            (21)         (157)
       Non-cash interest                                                           19            18
       Non-cash employee benefit expense                            (7)            (9)          (13)
       Change in current assets and liabilities,                      
          net of effects from acquisitions                            
            Receivables                                            (22)           (73)            1
            Inventories                                             (4)            10            14
            Prepaid expenses and other current assets               (1)            (1)            5
            Accounts payable and accrued liabilities               (61)            42            26
            Interest payable                                        (7)            (7)            5
            Income taxes                                            (1)             1            16
       Other, net                                                   (2)             1             5
    Net cash provided by operating activities                      411            149            78
                                                                      
Cash flows from investing activities                                  
    Property additions                                            (130)          (144)          (97)
    Timberland additions                                           (24)           (19)          (20)
    Investments in affiliates and acquisitions                     (34)            (3)             
    Proceeds from property and timberland                             
       disposals and sale of businesses                             10              4            24
    Net cash used for investing activities                        (178)          (162)          (93)
                                                                      
Cash flows from financing activities                                  
    Capital contribution, net of related expenses                                 370              
    Borrowings under bank credit facilities                                     1,372              
    Borrowings under senior notes                                                 400           500
    Net borrowings under accounts                                     
       receivable securitization programs                                          35             6
    Other increases in long-term debt                               20              4            12
    Payments of long-term debt and related premiums               (284)        (2,073)         (479)
    Deferred debt issuance costs                                    (4)           (77)          (25)
    Net cash provided by (used for) financing activities          (268)            31            14
                                                                      
Increase (decrease) in cash and cash equivalents                   (35)            18            (1)
Cash and cash equivalents                                             
    Beginning of year                                               62             44            45
    End of year                                                  $  27         $   62         $  44

</TABLE>
See notes to consolidated financial statements.
<PAGE>
                                         JSCE, Inc.
                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (Tabular amounts in millions)

1.  -- Basis of Presentation

JSCE, Inc. hereafter referred to as the "Company" is a wholly-owned
subsidiary of Jefferson Smurfit Corporation ("JSC").  JSC has no
operations other than its investment in JSCE, Inc.  On December 31, 1994
Jefferson Smurfit Corporation (U.S.), a wholly-owned subsidiary of the
Company, merged into its wholly-owned subsidiary, Container Corporation
of America ("CCA"), with CCA surviving and changing its name to
Jefferson Smurfit Corporation (U.S.) ("JSC (U.S.)").  The Company has no
operations other than its investment in JSC (U.S.).  In 1994, JSC
contributed 100% of the common stock of JSC (U.S.) to the Company.  This
transaction has been accounted for in a manner similar to a pooling of
interests, and accordingly, the consolidated financial statements for
all periods presented include the accounts of JSC (U.S.).  Prior to May
4, 1994, JSC had been named "SIBV/MS Holdings" and JSC (U.S.) had been
named "Jefferson Smurfit Corporation".  Prior to May 4, 1994, 50% of the
voting stock of JSC was owned by Smurfit Packaging Corporation ("SPC")
and Smurfit Holdings B.V. ("SHBV"), indirect wholly-owned subsidiaries
of Jefferson Smurfit Group plc ("JS Group"), a public corporation
organized under the laws of the Republic of Ireland.  The remaining 50%
was owned by The Morgan Stanley Leveraged Equity Fund II, L.P. ("MSLEF
II") and certain other investors. 

In 1994, JSC completed a recapitalization plan (the "Recapitalization")
to repay and refinance a substantial portion of its indebtedness.  In
connection with the Recapitalization, (i) JSC issued and sold 19,250,000
shares of common stock pursuant to a registered public offering at an
initial public offering price of $13.00 per share, (ii) JS Group,
through its wholly-owned subsidiary Smurfit International B.V. ("SIBV"),
purchased an additional 11,538,462 shares of common stock for $150
million, and (iii) JSC (U.S.) issued and sold $300 million aggregate
principal amount of unsecured 11.25% Series A Senior Notes due 2004 and
$100 million aggregate principal amount of unsecured 10.75% Series B
Senior Notes due 2002 (the "1994 Senior Notes") pursuant to a registered
public offering.

The deficit in stockholder's equity is primarily due to JSC's 1989
purchase of JSC (U.S.)'s common equity owned by JS Group and the
acquisition by JSC (U.S.) of its common equity owned by MSLEF I, which
were accounted for as purchases of treasury stock.  

2. -- Significant Accounting Policies

Nature of Operations:  The Company's major operations are in paper
products, newsprint production, recycling, and consumer packaging. 
Paper product operations procure virgin or recycled fiber and produce
paperboard for conversion into corrugated containers at the Company's
own facilities and third party converting operations.  Paper product
customers represent a diverse range of industries including paperboard
and paperboard packaging, wholesale trade, retailing and agri-business. 
The Company's newsprint operations produce newsprint from virgin or
recycled fiber primarily for the newspaper industry.  Recycling collects
wastepaper which is then resold to paper product operations of the
Company and third parties for conversion into boxboard, corrugated
containers, and other paper products.  Consumer packaging produces
labels and flexible packaging for use in industrial, medical, and
consumer product applications.  Customers and operations are principally
located in the United States.  Credit is extended to customers based on
an evaluation of their financial condition.
<PAGE>
2. -- Significant Accounting Policies (cont)

Principles of Consolidation:  The consolidated financial statements
include the accounts of the Company and its majority-owned subsidiaries. 
Significant intercompany accounts and transactions are eliminated in
consolidation.

Cash Equivalents:  The Company considers all highly liquid investments
with an original maturity of three months or less to be cash
equivalents.  At December 31, 1995, cash and cash equivalents of $27
million are pledged as collateral for obligations associated with the
accounts receivable securitization program (See Note 4).

Revenue Recognition:  Revenue is recognized at the time products are
shipped.

Inventories:  Inventories are valued at the lower of cost or market,
principally under the last-in, first-out ("LIFO") method except for $54
million in 1995 and $55 million in 1994 which are valued at the lower of
average cost or market.  First-in, first-out costs (which approximate
replacement costs) exceed the LIFO value by $84 million and $58 million
at December 31, 1995 and 1994, respectively.

Property, Plant and Equipment:  Property, plant and equipment are
carried at cost.  Provisions for depreciation and amortization are made
using straight-line rates over the estimated useful lives of the related
assets and the terms of the applicable leases for leasehold
improvements.

Timberland:  The portion of the costs of timberland attributed to
standing timber is charged against income as timber is cut, at rates
determined annually, based on the relationship of unamortized timber
costs to the estimated volume of recoverable timber.  The costs of
seedlings and reforestation of timberland are capitalized.

Deferred Debt Issuance Costs:  Deferred debt issuance costs are
amortized over the terms of the respective debt obligations using the
interest method.

Goodwill:  The excess of cost over the fair value assigned to the net
assets acquired is recorded as goodwill and is being amortized using the
straight-line method over 40 years.

Use of Estimates:  The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.  Actual
results could differ from those estimates.
<PAGE>
2. -- Significant Accounting Policies (cont)

Interest Rate Swap and Cap Agreements: The Company enters into interest
rate swap and cap agreements to reduce the impact of interest rate
fluctuations. Swap agreements involve the exchange of fixed and floating
rate interest payments without the exchange of the underlying principal
amount.  Cap agreements provide that the Company will receive a certain
amount when short-term interest rates exceed a threshold rate.  Periodic
amounts to be paid or received under interest rate swap and cap
agreements are accrued and recognized as adjustments to interest
expense.  Premiums paid on cap agreements are included in interest
payable and amortized to interest expense over the life of the
agreements.  Gains and losses realized upon settlement of these
agreements are deferred and amortized to interest expense over a period
relevant to the agreement if the underlying hedged instrument remains
outstanding, or immediately if the underlying hedged instrument is
settled.  

Recently Issued Accounting Standards:  In March 1995, the Financial
Accounting Standards Board issued Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of", which requires
impairment losses to be recorded on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the
assets' carrying amount.  SFAS No. 121 also addresses the accounting for
long-lived assets that are disposed of.  The Company will adopt SFAS No.
121 in the first quarter of 1996 and, based on current circumstances,
does not believe the effect of adoption will be material.

Reclassifications:  Certain reclassifications of prior year
presentations have been made to conform to the 1995 presentation.


3. -- Property, Plant and Equipment
<TABLE>
Property, plant and equipment at December 31 consists of:

                                                                         1995          1994 
<S>                                                                     <C>           <C>
Land                                                                    $   60        $   60
Buildings and leasehold improvements                                       268           254
Machinery, fixtures and equipment                                        1,815         1,696
                                                                         2,143         2,010
Less accumulated depreciation and amortization                             753           657
                                                                         1,390         1,353
Construction in progress                                                    66            74

       Net property, plant and equipment                                $1,456        $1,427
</TABLE>
<PAGE>
4. -- Long-Term Debt
<TABLE>
Long-term debt at December 31 consists of:

                                                                         1995          1994 
<S>                                                                     <C>           <C>
Tranche A term loan                                                     $  708        $  900
Tranche B term loan                                                        236           300
Revolving loans                                                             55            43
Accounts receivable securitization 
   program loans                                                           217           217
1994 series A senior notes                                                 300           300
1994 series B senior notes                                                 100           100
1993 senior notes                                                          500           500
Other                                                                       76            82
                                                                         2,192         2,442
Less current portion                                                        81            50
                                                                        $2,111        $2,392
</TABLE>
Aggregate annual maturities of long-term debt at December 31, 1995, for
the next five years are $81 million in 1996, $142 million in 1997, $146
million in 1998, $154 million in 1999, and $397 million in 2000.

1994 Credit Agreement
In connection with the Recapitalization, JSC (U.S.) entered into a bank
credit facility (the "1994 Credit Agreement") which consists of a $450
million revolving credit facility (the "Revolving Credit Facility") of
which up to $150 million may consist of letters of credit, a $900
million Tranche A Term Loan and a $300 million Tranche B Term Loan.  The
Revolving Credit Facility matures in 2001.  The Tranche A Term Loan
matures in various installments through 2001.  The Tranche B Term Loan
matures in various installments through 2002.

Outstanding loans under the Tranche A Term Loan and the Revolving Credit
Facility bear interest at rates selected at the option of JSC (U.S.)
equal to the alternate base rate ("ABR") plus .75% per annum or the
adjusted LIBOR Rate plus 1.75% per annum (7.82% at December 31, 1995). 
Interest on outstanding loans under the Tranche B Term Loan is  payable
at a rate per annum selected at the option of JSC (U.S.), equal to the
prime rate plus 2% per annum or the adjusted LIBOR Rate plus 3% per
annum (8.91% at December 31, 1995).  ABR is defined as the highest of
Chemical Bank's prime lending rate, 1/2 of 1% in excess of the Federal
Funds Rate or 1% in excess of the base certificate of deposit rate.  The
Tranche A and Tranche B Term Loans and the Revolving Credit Facility may
be prepaid at any time, in whole or in part, at the option of JSC
(U.S.).

A commitment fee of .375% per annum is assessed on the unused portion of
the Revolving Credit Facility.  At December 31, 1995, the unused portion
of this facility, after giving consideration to outstanding letters of
credit, was $301 million.
<PAGE>
4.  -- Long-Term Debt (cont)

The obligations under the 1994 Credit Agreement are unconditionally
guaranteed by JSC, the Company and its subsidiaries and are secured by
a security interest in substantially all of the assets of JSC (U.S.) and
its material subsidiaries, with the exception of cash, cash equivalents
and trade receivables.  The 1994 Credit Agreement is also secured by a
pledge of all the capital stock of each material subsidiary of JSC and
by certain intercompany notes.

The 1994 Credit Agreement contains various business and financial
covenants including, among other things, (i) limitations on dividends,
redemptions and repurchases of capital stock, (ii) limitations on the
incurrence of indebtedness, liens, leases and sale-leaseback
transactions, (iii) limitations on capital expenditures, (iv)
maintenance of minimum levels of consolidated earnings before
depreciation, interest, taxes and amortization and (v) maintenance of
minimum interest coverage ratios.  The 1994 Credit Agreement also
requires prepayments if JSC (U.S.) has excess cash flows, as defined, or
receives proceeds from: certain asset sales, insurance, issuance of
equity securities, or incurrence of certain indebtedness.

Accounts Receivable Securitization Program Loans
During 1995, JSC (U.S.) entered into a $315 million accounts receivable
securitization program (the "1995 Securitization").  The proceeds of the
1995 Securitization were used to extinguish JSC (U.S.)'s borrowings of
$230 million under the 1991 Securitization Program.  The 1995
Securitization provides for the sale of certain of the Company's trade
receivables to a wholly-owned, bankruptcy remote, limited purpose
subsidiary, Jefferson Smurfit Finance Corporation ("JS Finance"), which
finances its purchases of eligible JSC (U.S.) receivables through the
issuance of commercial paper or the proceeds of borrowings under a
revolving liquidity facility and a term loan.  JS Finance borrowed $15
million under the term loan, and may issue up to $300 million trade
receivables-backed commercial paper or borrow up to $300 million under
a revolving liquidity facility.  

Under the 1995 Securitization, JS Finance has granted a security
interest in all its assets, principally cash and cash equivalents of $27
million and trade accounts receivable of $217 million, at December 31,
1995.  Interest rates on borrowings under the 1995 Securitization are at
a variable rate on the remainder (5.78% at December 31, 1995).  At
December 31, 1995, $95 million was available for additional borrowing,
subject to JSC (U.S.)'s level of eligible accounts receivable. 
Borrowings under the Securitization Program, which expires December
1999, have been classified as long-term debt because of the Company's
intent to refinance this debt on a long-term basis and the availability
of such financing under the terms of the program.

1994 Senior Notes
In connection with the Recapitalization, JSC (U.S.) issued and sold $300
million  aggregate principal amount of unsecured 11.25% Series A Senior
Notes due 2004 and $100 million aggregate principal amount of unsecured
10.75% Series B Senior Notes due 2002.  The Series A Senior Notes are
redeemable  in whole or in part at the option of JSC (U.S.), at any time
on or after May 1, 1999 with premiums of 5.625% and 2.813% of the
principal amount if redeemed during the 12-month periods commencing May
1, 1999 and 2000, respectively.  In addition, up to $100 million
aggregate principal amount of Series A Senior Notes are redeemable at
110% of the principal amount prior to May 1, 1997 in connection with
certain stock issuances.  The Series B Senior Notes are not redeemable
prior to maturity.
<PAGE>
4.  -- Long-Term Debt (cont)

The 1994 Senior Notes, which are unconditionally guaranteed on a senior
basis by JSCE, Inc., rank pari passu with the 1994 Credit Agreement and
the 1993 Senior Notes.  The 1994 Senior Notes agreement contains
business and financial covenants which are less restrictive than those
contained in the 1994 Credit Agreement.

Holders of the 1994 Senior Notes have the right, subject to certain
limitations, to require JSC (U.S.) to repurchase their securities at
101% of the principal amount plus accrued and unpaid interest, upon the
occurrence of a change of control or in certain events from proceeds of
major asset sales, as defined.

1993 Senior Notes
In April 1993, JSC (U.S.) issued $500 million of unsecured 9.75% Senior
Notes (the "1993 Senior Notes") due 2003 which are not redeemable prior
to maturity.  The 1993 Senior Notes, which are unconditionally
guaranteed on a senior basis by JSCE, Inc., rank pari passu with the
1994 Credit Agreement and the 1994 Senior Notes.  The 1993 Senior Notes
agreement contains business and financial covenants which are
substantially less restrictive than those contained in the 1994 Credit
Agreement and substantially similar to those contained in the 1994
Senior Notes agreement.

Holders of the 1993 Senior Notes have the right, subject to certain
limitations, to require JSC (U.S.) to repurchase their securities at
101% of the principal amount plus accrued and unpaid interest, upon the
occurrence of a change in control or in certain events, from proceeds of
major asset sales, as defined.

Other Debt
Other long-term debt at December 31, 1995, is payable in varying
installments through the year 2029.  Interest rates on these obligations
averaged approximately 8.81% at December 31, 1995.

Interest Rate Swap and Cap Agreements 
The Company utilizes interest rate swap and cap agreements to manage its
interest rate exposure on long-term debt.  At December 31, 1995, the
Company has interest rate swap agreements with a notional amount of $483
million which effectively fix (for remaining periods up to 2 years) the
interest rate on variable rate borrowings.  The Company is currently
paying a weighted average fixed interest rate of 6.52% and receiving a
weighted average variable interest rate of 5.80%, calculated on the
notional amount.  In addition, the Company has a cap agreement with a
notional amount of $100 million (through 1996) on variable rate debt
which limits the Company's interest payments to a range of 5.5-7.0% on
the notional amount.  

The Company is exposed to credit loss in the event of non-performance by
the other parties to the interest rate swap agreements.  However, the
Company does not anticipate non-performance by the counterparties.

Other
Interest costs capitalized on construction projects in 1995, 1994, and
1993 totalled $4 million, $4 million, and $3 million, respectively. 
Interest payments on all debt instruments for 1995, 1994, and 1993 were
$228 million, $247 million, and $226 million, respectively.
<PAGE>
5.  -- Income Taxes

At December 31, 1995, the Company has net operating loss carryforwards
for federal income tax purposes of approximately $98 million (expiring
in the year 2009), none of which are available for utilization against
alternative minimum taxes.
<TABLE>
Significant components of the Company's deferred tax assets and
liabilities at December 31 are as follows:
                                                                          1995          1994
<S>                                                                       <C>           <C>
Deferred tax liabilities:
  
  Depreciation and depletion                                              $372          $365
  Prepaid pension costs                                                     34            31
  Other                                                                    118           107
     Total deferred tax liabilities                                        524           503
  
Deferred tax assets:

  Employee benefit plans                                                   127           120
  Restructuring and other charges                                           11            32
  Net operating loss and tax credit carryforwards                           71           163
  Other                                                                     43            43
     Total deferred tax assets                                             252           358
  Valuation allowance for deferred tax assets                              (11)          (25)
     Net deferred tax assets                                               241           333
     Net deferred tax liabilities                                         $283          $170
</TABLE>
Provision for (benefit from) income taxes before extraordinary item and 
cumulative effect of accounting changes were as follows:
<TABLE>
                                                                  Year Ended December 31,   
                                                             1995         1994          1993
<S>                                                         <C>           <C>          <C>
Current
  Federal                                                   $  38         $  1         $  28
  State and local                                               4            2             2
                                                               42            3            30
Deferred
  Federal                                                     (12)          39           (54)
  State and local                                               2            4             6
  Net operating loss carryforwards                            124          (30)          (71) 
                                                              114           13          (119)
Adjustment of deferred tax assets and 
  liabilities for enacted tax rate change                                                  6
                                                            $ 156         $ 16         $ (83)
</TABLE>
The Company increased its deferred tax assets and liabilities in 1993 as
a result of legislation enacted during 1993 increasing the corporate
federal statutory tax rate from 34% to 35% effective January 1, 1993.
<PAGE>
5.  -- Income Taxes (cont)

The federal income tax returns for 1989 through 1991 are currently under
examination.  While the ultimate results of such examination cannot be
predicted with certainty, the Company's management believes that the
examination will not have a material adverse effect on its consolidated
financial condition or results of operations.

A reconciliation of the difference between the statutory federal income
tax rate and the effective income tax rate as a percentage of income
(loss) before income taxes, extraordinary item, and cumulative effect of
accounting changes is as follows:
<TABLE>
                                                                  Year Ended December 31,   
                                                            1995         1994          1993 
<S>                                                         <C>          <C>         <C>
U.S. Federal statutory rate                                 35.0%        35.0%       (35.0%)
Adjustment of deferred tax assets 
  and liabilities for enacted 
  tax rate change                                                                      2.2  
State and local taxes, net of 
  federal tax benefit                                        3.9         (4.8)        (2.0) 
Permanent differences from applying 
  purchase accounting                                        3.2         23.7          3.5  
Effect of valuation allowances on 
  deferred tax assets, net of 
  federal benefit                                           (3.4)         1.1          1.2  
Other, net                                                                2.1         (2.1) 
                                                            38.7%        57.1%       (32.2%)
</TABLE>
The Company made income tax payments of $41 million, $3 million, and $33
million, in 1995, 1994, and 1993, respectively. 

Effective January 1, 1993, the Company changed its method of accounting
for income taxes from the deferred method to the liability method
required by SFAS No. 109, "Accounting for Income Taxes".  

The cumulative effect of adopting SFAS No. 109 as of January 1, 1993 was
to increase net income by $21 million.  For 1993, application of SFAS
No. 109 increased the pretax loss by $14 million because of increased
depreciation expense as a result of the requirement to report assets
acquired in prior business combinations at pretax amounts.


6.  -- Employee Benefit Plans

Pension Plans
The Company sponsors noncontributory defined benefit pension plans
covering substantially all employees not covered by multi-employer
plans.  Plans that cover salaried and management employees provide
pension benefits that are based on the employee's five highest
consecutive calendar years' compensation during the last ten years of
service.  Plans covering non-salaried employees generally provide
benefits of stated amounts for each year of service.  These plans
provide reduced benefits for early retirement.  The Company's funding
policy is to make minimum annual contributions required by applicable
regulations.  The Company also participates in several multi-employer
pension plans, which provide defined benefits to certain union
employees.
<PAGE>
6.  -- Employee Benefit Plans (cont)

Assumptions used in the accounting for the defined benefit plans were:
<TABLE>
                                                            1995         1994          1993
<S>                                                         <C>           <C>          <C>
Weighted average discount rate                              7.25%         8.5%         7.6%
Rate of increase in compensation levels                      4.0%         5.0%         4.0%
Expected long-term rate of return on assets                  9.5%        10.0%        10.0%
</TABLE>
The components of net pension income for the defined benefit plans and
the total contributions charged to pension expense for the multi-
employer plans follow:
<TABLE>
                                                                     Year Ended December 31, 
                                                             1995         1994         1993
<S>                                                         <C>           <C>          <C>
Defined benefit plans:
  Service cost - benefits earned during the period          $  13         $ 14         $ 13
  Interest cost on projected benefit obligations               59           54           54
  Actual return on plan assets                               (155)          (8)         (91)
  Net amortization and deferral                                75          (71)           9
Multi-employer plans                                            2            2            2
  Net pension income                                        $  (6)        $ (9)        $(13)
</TABLE>
The following table sets forth the funded status and amounts recognized
in the consolidated balance sheets at December 31 for the Company's and
its subsidiaries' defined benefit pension plans:
<TABLE>
                                                                    1995               1994
<S>                                                                 <C>                <C>
Actuarial present value of benefit obligations:                         
  Vested benefit obligations                                        $781               $632

  Accumulated benefit obligations                                   $820               $670

Projected benefit obligations                                       $857               $700
Plan assets at fair value                                            845                740
Plan assets (less than) in excess of projected 
  benefit obligations                                                (12)                40
Unrecognized net loss                                                119                 63
Unrecognized net asset at December 31,
  being recognized over 14 to 15 years                               (21)               (25)
Net pension asset                                                   $ 86               $ 78
</TABLE>
Approximately 41% of plan assets at December 31, 1995 are invested in
cash equivalents or debt securities and 59% are invested in equity
securities, including common stock of JS Group having a market value of
$78 million. 

Savings Plans
The Company sponsors voluntary savings plans covering substantially all
salaried and certain hourly employees.  The Company match, which is paid
in JSC stock, is 50% of each participant's contributions up to an annual
maximum.  The Company's expense for the savings plans totalled $6
million, $5 million, and $5 million in 1995, 1994, and 1993,
respectively.
<PAGE>
6.  -- Employee Benefit Plans (cont)

Postretirement Health Care and Life Insurance Benefits
The Company provides certain health care and life insurance benefits for
all salaried and certain hourly employees.  The Company has various
plans under which the cost may be borne either by the Company, the
employee or partially by each party.  The Company does not currently
fund these plans.  These benefits are discretionary and are not a
commitment to long-term benefit payments.  The plans were amended
effective January 1, 1993 to allow employees who retire on or after
January 1, 1994 to become eligible for these benefits only if they
retire after age 60 while working for the Company.

Effective January 1, 1993, the Company adopted SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions", which
requires companies to accrue the expected cost of retiree benefit
payments, other than pensions, during employees' active service period. 
The Company elected to immediately recognize the accumulated liability,
measured as of January 1, 1993.  The cumulative effect of this change in
accounting principle resulted in a charge of $37 million (net of income
tax benefits of $22 million).  The Company had previously recorded an
obligation of $36 million in connection with prior business
combinations.  

The following table sets forth the accumulated postretirement benefit
obligation ("APBO") with respect to these benefits as of December 31:
<TABLE>
                                                                    1995               1994
<S>                                                                 <C>                <C>
Retirees                                                            $ 56               $ 52
Active employees                                                      38                 34
Total accumulated postretirement benefit obligation                   94                 86
Unrecognized net gain                                                  6                 13
Accrued postretirement benefit cost                                 $100               $ 99
</TABLE>
Net periodic postretirement benefit cost included the following components:
<TABLE>
                                                                    1995               1994
<S>                                                                  <C>                <C>
Service cost - benefits earned during the period                     $ 1                $ 2
Interest cost on accumulated postretirement
  benefit obligation                                                   7                  7
Net amortization                                                      (1)                (1)
Net periodic postretirement benefit cost                             $ 7                $ 8
</TABLE>

A weighted-average discount rate of 7.25% and 8.5% was used in
determining the APBO at December 31, 1995 and 1994, respectively.  The
weighted-average annual assumed rate of increase in the per capita cost
of covered benefits ("health care cost trend rate") was 9.5%, with an
annual decline of 1% until the rate reaches 4.25% in the year 2001.  The
effect of a 1% increase in the assumed health care cost trend rate would
increase the APBO as of December 31, 1995 by $2 million and have no
effect on the annual net periodic postretirement benefit cost for 1995.
<PAGE>
7.  -- Related Party Transactions

Transactions with JS Group
Transactions with JS Group, its subsidiaries and affiliated companies
were as follows:
<TABLE>
                                                                     Year Ended December 31,
                                                                   1995       1994      1993

<S>                                                                <C>         <C>       <C>
Product sales                                                      $ 44        $36       $18
Product and raw material purchases                                  108         71        49
Management services income                                            4          4         6
Charges from JS Group for services provided                           1          1          
Charges from JS Group for letter of credit, 
  commitment fees and related expenses                                           3         3
Charges to JS Group for costs pertaining to
   the Fernandina No. 2 paperboard machine                           57         54        62
Receivables at December 31                                            3          4         2
Payables at December 31                                              13         11        12
</TABLE>
Product sales to and purchases from JS Group, its subsidiaries, and
affiliates are consummated on terms generally similar to those
prevailing with unrelated parties.

The Company provides certain subsidiaries and affiliates of JS Group
with general management and elective management services under separate
Management Services Agreements.  In consideration for general management
services, the Company is paid a fee up to 2% of the subsidiaries' or
affiliates' gross sales.  In consideration for elective services, the
Company is reimbursed for its direct cost of providing such services.

An affiliate of JS Group owns the No. 2 paperboard machine that is
located in the Company's Fernandina Beach, Florida paperboard mill (the
"Fernandina Mill").  Pursuant to an operating agreement between the
Company and the affiliate, the Company operates and manages the No. 2
paperboard machine and is compensated for its direct production and
manufacturing costs and indirect manufacturing, selling and
administrative costs incurred by the Company for the entire Fernandina
Mill.  The compensation is determined by applying various formulas and
agreed upon amounts to the subject costs.  The amounts reimbursed to the
Company are reflected as reductions of cost of goods sold and selling
and administrative expenses in the accompanying consolidated statements
of operations.

Transactions with Times Mirror
In July 1995, under the terms of a shareholder agreement, JSC (U.S.)
acquired the remaining 20% minority interest of Smurfit Newsprint
Corporation ("SNC") from The Times Mirror Company ("Times Mirror").  SNC
supplies newsprint to Times Mirror at amounts which approximate
prevailing market prices under the terms of a long-term agreement.  The
obligations of the Company and Times Mirror to supply and purchase
newsprint are wholly or partially terminable upon the occurrence of
certain defined events.  Sales to Times Mirror for 1995, 1994, and 1993
were $189 million, $113 million, and $115 million, respectively.

Transactions with Morgan Stanley & Co.
In connection with the Recapitalization, Morgan Stanley & Co., in its
capacity as underwriter of public equity and debt securities, received
fees from the Company of $16 million in 1994.
<PAGE>
8.  -- Leases

The Company leases certain facilities and equipment for production,
selling and administrative purposes under operating leases.  Future
minimum lease payments at December 31, 1995, required under operating
leases that have initial or remaining noncancelable lease terms in
excess of one year are $29 million in 1996, $22 million in 1997, $15
million in 1998, $11 million in 1999, $9 million in 2000 and $20 million
thereafter.

Net rental expense was $48 million, $46 million, and $45 million for
1995, 1994, and 1993, respectively.


9. -- Fair Value of Financial Instruments

The estimated fair values of the Company's financial instruments are as
follows:
<TABLE>
                                                              December 31,           
                                                     1995                 1994       
                                            Carrying     Fair     Carrying     Fair  
                                             Amount     Value      Amount      Value 
<S>                                           <C>        <C>      <C>           <C>
Assets
  Cash and cash equivalents                   $   27     $  27    $     62      $  62
  Unrealized gain on interest 
     rate swap agreements                                                           4


Liabilities
  Long-term debt, including 
     current maturities                        2,192      2,184      2,442      2,402
  Unrealized loss on interest 
     rate swap agreements                                     5                     8
  Realized loss on interest 
     rate swap agreements  
     marked to market                                                    4          4

</TABLE>
The carrying amount of cash equivalents approximates fair value because
of the short maturity of those instruments.  The fair value of the
Company's long-term debt is estimated based on the quoted market prices
for the same or similar issues or on the current rates offered to the
Company for debt of the same remaining maturities.  The fair value of
the interest rate swap agreements is the estimated amount the Company
would pay or receive, net of accrued interest expense, to terminate the
agreements at December 31, 1995 and 1994, taking into account current
interest rates and the current creditworthiness of the swap
counterparties.

<PAGE>
10. -- Restructuring Charge

During 1993, the Company recorded a pretax charge of $96 million to
recognize the effects of a restructuring program designed to improve the
Company's long-term competitive position.  Since 1993, the Company has
written down the assets of closed facilities and other nonproductive
assets totalling $35 million, and made cash expenditures of $33 million
relating to direct expenses associated with plant closures, reductions
in workforce, realignment and consolidation of various  manufacturing
operations.  The remaining balance of the restructuring liability at
December 31, 1995 was $28 million, the majority of which is expected to
be paid in 1996.  The restructuring program is proceeding as originally
planned, and no significant adjustment to the reserve is anticipated at
this time.


11. -- Contingencies

The Company's past and present operations include activities which are
subject to federal, state and local environmental requirements,
particularly relating to air and water quality.  The Company faces
potential environmental liability as a result of violations of permit
terms and similar authorizations that have occurred from time to time at
its facilities.  The Company faces potential liability for response
costs at various sites with respect to which the Company has received
notice that it may be a potentially responsible party ("PRP") as well as
contamination of certain Company-owned properties, under the
Comprehensive Environmental Response, Compensation and Liability Act
concerning hazardous substance contamination.  In estimating its
reserves for environmental remediation and future costs, the Company's
estimated liability reflects only the Company's expected share.  In
determining the liability, the estimate takes into consideration the
number of other PRP's at each site, the identity and financial condition
of such parties and experience regarding similar matters.  No amounts
have been recorded for potential recoveries from insurance carriers.

During 1993, the Company recorded a pretax charge of $54 million of
which $39 million represents asbestos and PCB removal, solid waste
cleanup at existing and former operating sites and expenses for response
costs at various sites where the Company has received notice that it is
a potentially responsible party.  The Company made payments of $9
million and $4 million related to PRP sites and other environmental
cleanup in 1995 and 1994, respectively.

The Company is a defendant in a number of lawsuits and claims arising
out of the conduct of its business, including those related to
environmental matters.  While the
ultimate results of such suits or other proceedings against the Company
cannot be predicted with certainty, the management of the Company
believes that the resolution of these matters will not have a material
adverse effect on its consolidated financial condition or results of
operation.

In the fourth quarter of 1995, the Company recorded a pretax charge
totalling $25 million related to product quality matters and failure to
follow proper manufacturing and internal procedures in an immaterial
non-core product line.  The Company is continuing to further evaluate
this issue and expects to conclude its review during the second fiscal
quarter.  Based upon the information currently available to management,
the Company believes the reserve is adequate but intends to reevaluate
the adequacy of the reserve at the conclusion of its review.
<PAGE>
12. -- Business Segment Information

The Company's principal lines of business are paperboard/packaging
products and newsprint.  The paperboard/packaging products segment
includes the manufacture and distribution of containerboard, boxboard
and cylinderboard, corrugated containers, folding cartons, fiber
partitions, spiral cores and tubes, labels and flexible packaging.  The
newsprint segment includes the manufacture and distribution of
newsprint.  A summary by business segment of net sales, income (loss)
from operations, identifiable assets, capital expenditures and
depreciation, depletion and amortization follows:
<TABLE>
                                                               Year Ended December 31,     
                                                        1995           1994           1993 
<S>                                                    <C>            <C>            <C>
Net sales
  Paperboard/packaging products                        $3,706         $2,974         $2,699
  Newsprint                                               387            259            248
                                                       $4,093         $3,233         $2,947
Income (loss) from operations
  Paperboard/packaging products                        $  604         $  308         $   13
  Newsprint                                                26            (17)           (22)
     Total income (loss) from operations                  630            291             (9)
Interest expense                                         (234)          (269)          (254)
Other, net                                                  7              6              5
Income (loss) before income taxes, 
  extraordinary item and cumulative 
  effect of accounting changes                         $  403         $   28         $ (258)

Identifiable assets
  Paperboard/packaging products                        $2,294         $2,256         $2,153
  Newsprint                                               248            231            225
  Corporate assets                                        241            272            219
                                                       $2,783         $2,759         $2,597

Capital expenditures
  Paperboard/packaging products                        $  137         $  146         $  107
  Newsprint                                                17             17             10
                                                       $  154         $  163         $  117

Depreciation, depletion and amortization
  Paperboard/packaging products                        $  122         $  115         $  115
  Newsprint                                                17             16             16
                                                       $  139         $  131         $  131
</TABLE>
Sales and transfers between segments are not material.  Export sales are
less than 10% of total sales.  Corporate assets consist principally of
cash and cash equivalents, deferred income taxes, deferred debt issuance
costs and other assets which are not specific to a segment.
<PAGE>
13. -- Summarized Financial Information JSC (U.S.)

The following summarized financial information is presented for JSC
(U.S.), a wholly-owned subsidiary of JSCE, Inc.  No separate financial
statements are presented for JSC (U.S.) because the financial statements
of JSC (U.S.) are identical to those of JSCE, Inc.  JSC (U.S.) is the
borrower under the 1994 Credit Agreement, the issuer of the 1994 Senior
Notes and the 1993 Senior Notes.  These securities are guaranteed by
JSCE, Inc.
<TABLE>
Condensed Consolidated Balance Sheets

                                                                          December 31,     
                                                                       1995            1994

<S>                                                                  <C>            <C> 
Current assets                                                       $   644        $   647
Property, plant and equipment and timberlands, net                     1,714          1,686
Goodwill                                                                 253            257
Other assets                                                             172            169
  Total assets                                                         2,783        $ 2,759

Current liabilities                                                  $   597        $   636
Long-term debt                                                         2,111          2,392
Other liabilities                                                        562            461
Stockholder's deficit                                                       
  Common stock                                                                             
  Additional paid-in capital                                           1,102          1,102
  Retained earnings (deficit)                                         (1,589)        (1,832)
     Total stockholder's deficit                                        (487)          (730)
  Total liabilities and stockholder's deficit                        $ 2,783        $ 2,759
</TABLE>
<PAGE>
13. -- Summarized Financial Information JSC (U.S.) (cont)
<TABLE>
Condensed Consolidated Statements of Operations

                                                                Year Ended December 31,    
                                                        1995           1994           1993 
<S>                                                    <C>            <C>            <C>
Net sales                                              $4,093         $3,233         $2,947
Cost and expenses                                       3,463          2,942          2,956
Interest expense                                          234            269            254
Other income (expense), net                                 7              6              5
Income (loss) before income taxes,
  extraordinary item and cumulative
  effect of accounting changes                            403             28           (258)
Provision for (benefit from) income 
  taxes                                                   156             16            (83)
Extraordinary item
  Loss from early extinguishment of 
    debt, net of income tax benefits                       (4)           (55)           (38)

Cumulative effect of accounting changes
  Postretirement benefits, net of
    income tax benefit                                                                  (37)
  Income taxes                                                                           21

Net income (loss)                                      $  243         $  (43)        $ (229)
</TABLE>
<PAGE>
14. -- Quarterly Results (Unaudited)

The following is a summary of the unaudited quarterly results of
operations:
<TABLE>
                                                 First      Second        Third      Fourth
                                                Quarter     Quarter      Quarter     Quarter

<C>                                                <C>       <C>          <C>           <C>
1995
  Net sales                                        $986      $1,083       $1,051        $973
  Gross profit                                      187         228          245         211
  Income from operations                            126         165          185         154
  Income before extraordinary item                   39          66           77          65
  Loss from early extinguishment
     of debt                                                                  (3)         (1)
  Net Income                                         39          66           74          64

1994
  Net sales                                        $728      $  766       $  858        $881
  Gross profit                                       98         111          136         169
  Income from operations                             47          56           80         108
  Income (loss) before 
     extraordinary item                             (12)         (9)           6          27
  Loss from early extinguishment
     of debt                                                    (51)                      (4)
  Net income (loss)                                 (12)        (60)           6          23
</TABLE>
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

None

                                       PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

The following table sets forth the names and ages of the directors
of the Company.

                                 Name               Age
                           Michael W.J. Smurfit      59
                           Howard E. Kilroy          60
                           James E. Terrill          62
                           James R. Thompson         59
                           Donald P. Brennan         55
                           Alan E. Goldberg          41
                           David R. Ramsay           32
                           G. Thompson Hutton        40

The Board of Directors currently consists of eight directors.  The
directors are classified into three groups:  three directors having
terms expiring in 1996 (Messrs. Kilroy, Goldberg and Thompson), two
directors having terms expiring in 1997 (Messrs. Smurfit and
Brennan) and three directors having terms expiring in 1998 (Messrs.
Terrill, Ramsay and Hutton).


Executive Officers

The following table sets forth the names, ages and positions of the
executive officers of the Company.
<TABLE>
       Name                Age               Position         
<S>                        <C>     <C>
Michael W.J. Smurfit       59      Chairman of the Board and Director
James E. Terrill           62      President, Chief Executive Officer and Director
Richard W. Graham          61      Senior Vice President 
James P. Davis             40      Vice President and General Manager - Consumer
                                   Packaging Division
Raymond G. Duffy           54      Vice President - Planning
John R. Funke              54      Vice President and Chief Financial Officer
Richard J. Golden          53      Vice President - Purchasing
Michael F. Harrington      55      Vice President - Personnel and Human Resources
Charles A. Hinrichs        42      Vice President and Treasurer
F. Scott Macfarlane        50      Vice President and General Manager - Folding
                                   Carton and Boxboard Mill Division
Edward F. McCallum         61      Vice President and General Manager - Container
                                   Division
Lyle L. Meyer              59      Vice President
Patrick J. Moore           41      Vice President and General Manager - Industrial
                                   Packaging Division
David C. Stevens           61      Vice President and General Manager -
                                   Reclamation Division
Truman L. Sturdevant       61      Vice President and General Manager of SNC
Michael E. Tierney         47      Vice President, General Counsel and Secretary
Richard K. Volland         57      Vice President - Physical Distribution
William N. Wandmacher      53      Vice President and General Manager -
                                   Containerboard Mill Division
Gary L. West               53      Vice President - Sales and Marketing           
<PAGE>
Biographies

Donald P. Brennan has been a Director of the Company since 1989. 
Mr. Brennan is an Advisory Director of Morgan Stanley & Co. Inc.
("MS&Co.").  He was Managing Director of MS&Co. from 1984 to
February 1996, responsible for MS&Co.'s Merchant Banking Division. 
He is Chairman and President of Morgan Stanley Leveraged Equity
Fund II, Inc. ("MSLEF II, Inc.") and Morgan Stanley Capital
Partners III, Inc. ("MSCP III, Inc.").  Mr. Brennan serves as
Director of Fort Howard Corporation, PSF Finance Holdings, Inc. and
SITA Telecommunications Holdings N.V.

James P. Davis was appointed Vice President and General Manager -
Consumer Packaging Division in November 1995.  He served as
Division Director of Operations from August 1995 to November 1995. 
Prior to that time, he held various management positions in the
Container Division since joining the Company in 1977.

Raymond G. Duffy has been Vice President - Planning since July 1983
and served as Director of Corporate Planning from 1980 to 1983.

John R. Funke has been Vice President and Chief Financial Officer
since April 1989 and was Corporate Controller and Secretary from
1982 to April 1989.

Alan E. Goldberg has been a Director of the Company since 1989. 
Mr. Goldberg joined MS&Co. in 1979 and has been a member of
MS&Co.'s Merchant Banking Division since its formation in 1985 and
a Managing Director of MS&Co. since 1988.  Mr. Goldberg is a
Director and a Vice Chairman of MSCP III, Inc. and MSLEF II, Inc. 
Mr. Goldberg also serves as Director of Amerin Guaranty
Corporation,  CIMIC Holdings Limited, Centre Cat Limited, Hamilton
Services Limited and Risk Management Solutions, Inc.

Richard J. Golden has been Vice President - Purchasing since
January 1985 and was Director of Corporate Purchasing from October
1981 to January 1985.  In January 1994, he was assigned
responsibility for world-wide purchasing for Jefferson Smurfit
Group plc ("JS Group"), a public company organized under the laws
of the Republic of Ireland.

Richard W. Graham was appointed Senior Vice President in February
1994.  He served as Vice President and General Manager - Folding
Carton and Boxboard Mill Division from February 1991 to January
1994.  Mr. Graham was Vice President and General Manager - Folding
Carton Division from October 1986 to February 1991.  

Michael F. Harrington was appointed Vice President - Personnel and
Human Resources in January 1992.  Prior to joining the Company, he
was Corporate Director of Labor Relations/Safety and Health with
Boise Cascade Corporation for more than 5 years.
Charles A. Hinrichs was appointed Vice President and Treasurer in
April 1995.  Prior to joining the Company, he was employed by The
Boatmen's National Bank of St. Louis for 13 years where most
recently he was Senior Vice President and Chief Credit Officer.
<PAGE>
G. Thompson Hutton was elected to the Board of Directors in
December 1994.  Mr. Hutton has been President and Chief Executive
Officer of Risk Management Solutions, Inc., an information services
company based in Menlo Park, California, since 1991.  Prior to that
he was a management consultant with McKinsey & Company, Inc. from
1986 to 1991.  He also serves as a Trustee of Colorado Outward
Bound School.

Howard E. Kilroy has been a Director of the Company since 1989. 
Mr. Kilroy was Chief Operations Director of JS Group from 1978
until March 1995 and President of JS Group from October 1986 until
March 1995.  He was a member of the Supervisory Board of Smurfit
International B.V. ("SIBV") from January 1978 to January 1992.  He
was Senior Vice President of the Company for over 5 years.  He
retired from his executive positions with JS Group and the Company
at the end of March 1995, but remains a Director of JS Group and
the Company.  In addition, he is Governor (Chairman) of Bank of
Ireland and a Director of CRH plc.

F. Scott Macfarlane was appointed Vice President and General
Manager - Folding Carton and Boxboard Mill Division in November
1995.  He served as Vice President and General Manager of the
Folding Carton Division from December 1993 to November 1995.  Since
joining the Company in 1971, he has held increasingly responsible
positions within the Folding Carton Division.

Edward F. McCallum has been Vice President and General Manager -
Container Division since October 1992.  He served as Vice President
and General Manager of the Industrial Packaging Division from
January 1991 to October 1992.  Prior to that time, he served in
various positions in the Container Division since joining the
Company in 1971.

Lyle L. Meyer has been Vice President since April 1989.  He served
as President of Smurfit Pension and Insurance Services Company
("SPISCO") from 1982 until 1992, when SPISCO was merged into the
Company.

Patrick J. Moore has been Vice President and General Manager -
Industrial Packaging Division since December 1994.  He served as
Vice President and Treasurer from February 1993 to December 1994
and was Treasurer from October 1990 to February 1993.  Prior to
joining the Company in 1987 as Assistant Treasurer, Mr. Moore was
with Continental Bank in Chicago where he served in various
corporate lending, international banking and administrative
capacities.

David R. Ramsay has been a Director of the Company since 1989.  Mr.
Ramsay joined MS&Co. in 1989 and is a Vice President of MS&Co.'s
Merchant Banking Division.   Mr. Ramsay also serves as a Director
of ARM Financial Group Inc., Integrity Life Insurance Company,
National Integrity Life Insurance Company, Consolidated Hydro,
Inc., Hamilton Services Limited,  Risk Management Solutions, Inc.
and PSF Finance Holdings, Inc.
<PAGE>
Michael W.J. Smurfit has been Chairman and Chief Executive Officer
of JS Group since 1977.  Dr. Smurfit has been Chairman of the Board
of the Company since 1989.  He was Chief Executive Officer of the
Company prior to July 1990.

David C. Stevens has been Vice President and General Manager -
Reclamation Division since January 1993.  He joined the Company in
1987 as General Sales Manager and was named Vice President later
that year.  He held various management positions with International
Paper and was President of Mead Container Division prior to joining
the Company.

Truman L. Sturdevant has been Vice President and General Manager of
SNC since August 1990.  Mr. Sturdevant joined the Company in 1984
as Vice President and General Manager of the Oregon City newsprint
mill.

James E. Terrill was named a Director and President and Chief
Executive Officer in February 1994.  He served as Executive Vice
President - Operations from August 1990 to February 1994.  He also
served as Executive Vice President of SNC from February 1993 to
February 1994 and was President of SNC from February 1986 to
February 1993.  

James R. Thompson was elected to the Board of Directors in July
1994.  He is Chairman of Winston & Strawn, a law firm that
regularly represents the Company on numerous matters.  He served as
Governor of the State of Illinois from 1977 to 1991.  Mr. Thompson
also serves as a Director of FMC Corporation, the Chicago Board of
Trade, International Advisory Council of the Bank of Montreal,
Prime Retail, Inc., Pechiney International, Wackenhut Corrections
Corporation, Hollinger International, Inc. and Union Pacific
Resources, Inc.

Michael E. Tierney has been Vice President, General Counsel and
Secretary since January 1993.  He served previously as Senior
Counsel and Assistant Secretary since joining the Company in 1987.

Richard K. Volland has been Vice President - Physical Distribution
since 1978.

William N. Wandmacher has been Vice President and General Manager -
 Containerboard Mill Division since January 1993.  He served as 
Division Vice President - Medium Mills from October 1986 to January
1993.  Since joining the Company in 1966, he has held increasingly
responsible positions in production, plant management and planning,
both domestic and foreign.

Gary L. West has been Vice President - Sales and Marketing since
December 1994.  He was Vice President and General Manager -
Industrial Packaging Division from  October 1992 to December 1994. 
He served as Vice President - Converting and Marketing for the
Industrial Packaging Division from January 1991 to October 1992. 
Prior to that time, he held various management positions in the
Container and Consumer Packaging divisions since joining the
Company in 1980.
<PAGE>
ITEM 11.  EXECUTIVE COMPENSATION

The information required in response to this item is set forth
under the captions "Executive Compensation", "Report of the
Compensation Committee on Executive Compensation" and "Appointment
Committee Interlocks and Insider Participation" in JSC's Proxy
Statement in connection with the Annual Meeting of Stockholders to
be held on May 9, 1996, which will be filed with the Securities and
Exchange Commission on or before April 30, 1996 (the "Proxy
Statement"), and is incorporated herein by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

All of the outstanding JSC (U.S.) Common Stock is owned by JSCE,
and all of the outstanding JSCE Common Stock is owned by JSC.  

Additional information required in response to this item is set
forth under the caption "Principal Stockholders" in JSC's Proxy
Statement and is incorporated herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required in response to this item is set forth
under the caption "Certain Transactions" in JSC's Proxy Statement
and is incorporated herein by reference.


<PAGE>
                                        PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.

(a)     (1) and (2)  The list of Financial Statements and Financial
        Statement Schedules required by this item are included in
        Item 8 on page 22.
        (3)  Exhibits.  
 3.1        Certificate of Incorporation of the Company (incorporated
            by reference to Exhibit 3.1 to JSCE's Annual Report on
            Form 10-K for the fiscal year ended December 31, 1994).
 3.2        By-laws of the Company (incorporated by reference to
            Exhibit 3.2 to JSCE's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1994). 
 4.1        Indenture for the Series A 1994 Senior Notes
            (incorporated by reference to Exhibit 4.1 to JSC's
            quarterly report on Form 10-Q for the quarter ended March
            31, 1994). 
 4.2        Indenture for the Series B 1994 Senior Notes
            (incorporated by reference to Exhibit 4.2 to JSC's
            quarterly report on Form 10-Q for the quarter ended March
            31, 1994).
 4.3        Indenture for the 1993 Senior Notes (incorporated by
            reference to Exhibit 4.4 to JSC's Registration Statement
            on Form S-1 (File No. 33-75520)).
 4.4        First Supplemental Indenture to the 1993 Senior Note
            Indenture (incorporated by reference to Exhibit 4.5 to
            JSC's Registration Statement on Form S-1 (File No. 33-
            75520)).
10.1        Second Amended and Restated Organization Agreement, as of
            August 26, 1992, among JSC (U.S.), Container Corporation
            of America ("CCA"), MSLEF II, Inc., SIBV, JSC and The
            Morgan Stanley Leveraged Equity Fund II, L.P. ("MSLEF
            II") (incorporated by reference to Exhibit 10.1(d) to JSC
            (U.S.)'s quarterly report on Form 10-Q for the quarter
            ended September 30, 1992).
10.2        Stockholders Agreement among JSC, SIBV, MSLEF II and
            certain related entities (incorporated by reference to
            Exhibit 10.2 to JSC's quarterly report on Form 10-Q for
            the quarter ended March 31, 1994).
10.3        Registration Rights Agreement among JSC, MSLEF II and
            SIBV (incorporated by reference to Exhibit 10.3 to JSC's
            quarterly report on Form 10-Q for the quarter ended March
            31, 1994).
10.4        Subscription Agreement among JSC, JSC (U.S.), CCA and
            SIBV (incorporated by reference to Exhibit 10.4 to JSC's
            quarterly report on Form 10-Q for the quarter ended March
            31, 1994).
10.5(a)     Restated Newsprint Agreement, dated January 1, 1990, by
            and between SNC and The Times Mirror Company
            (incorporated by reference to Exhibit 10.39 to JSC
            (U.S.)'s Annual Report on Form 10-K for the fiscal year
            ended December 31, 1990).  Portions of this exhibit have
            been excluded pursuant to Rule 24b-2 of the Securities
            Exchange Act of 1934, as amended.
10.5(b)     Amendment No. 1 to the Restated Newsprint Agreement
            (incorporated by reference to Exhibit 10.6(b) to JSC's
            Registration Statement on Form S-1 (File No. 33-75520)).
10.6        Operating Agreement, dated as of April 30, 1992, by and
            between CCA and Smurfit Paperboard, Inc. (incorporated by
            reference to Exhibit 10.42 to JSC (U.S.)'s quarterly
            report on Form 10-Q for the quarter ended March 31,
            1992).
10.7        Deferred Compensation Agreement, dated January 1, 1979,
            between JSC (U.S.) and James B. Malloy, as amended and
            effective November 10, 1983 (incorporated by reference to
            Exhibit 10(m) to JSC (U.S.)'s Registration Statement on
            Form S-1 (File No. 2-86554)).
10.8(a)     JSC (U.S.) Deferred Compensation Capital Enhancement Plan
            (incorporated by reference to Exhibit 10(r) to JSC
            (U.S.)'s quarterly report on Form 10-Q for the quarter
            ended September 30, 1985).
10.8(b)     Amendment No. 1 to the Deferred Compensation Capital
            Enhancement Plan (incorporated by reference to Exhibit
            10.37 to JSC (U.S.)/CCA's Annual Report on Form 10-K for
            the fiscal year ended December 31, 1989).
10.9(a)     JSC (U.S.) Deferred Director's Fee Plan (incorporated by
            reference to Exhibit 10.33 to JSC (U.S.)/CCA's Annual
            Report on Form 10-K for the fiscal year ended December
            31, 1989).
10.9(b)     Amendment No. 1 to JSC (U.S.) Deferred Director's Fee
            Plan (incorporated by reference to Exhibit 10.34 to JSC
            (U.S.)/CCA's Annual Report on Form 10-K for the fiscal
            year ended December 31, 1989).
10.10       Jefferson Smurfit Corporation (U.S.) Management Incentive
            Plan. (incorporated by reference to Exhibit 10.10 to
            JSC's Annual Report on Form 10-K for the fiscal year
            ended December 31, 1995).
10.11       Jefferson Smurfit Corporation (U.S.) 1994 Long-Term
            Incentive Plan (incorporated by reference to Exhibit
            10.13 to JSC's Registration Statement on Form S-1 (File
            No. 33-75520)).
10.12       Rights Agreement, dated as of April 30, 1992, among CCA,
            Smurfit Paperboard, Inc. and Bankers Trust Company, as
            collateral trustee (incorporated by reference to Exhibit
            10.43 to JSC (U.S.)'s quarterly report on Form 10-Q for
            the quarter ended March 31, 1992).
10.13(a)    1992 SIBV/MS Holdings, Inc. Stock Option Plan
            (incorporated by reference to Exhibit 10.48 to JSC
            (U.S.)'s quarterly report on Form 10-Q for the quarter
            ended September 30, 1992).
10.13(b)    Amendment No. 1 to 1992 SIBV/MS Holdings, Inc. Stock
            Option Plan (incorporated by reference to Exhibit
            10.16(b) to JSC's Registration Statement on Form S-1
            (File No. 33-75520)).
10.14       Credit Agreement, among JSCE, JSC (U.S.) and the banks
            parties thereto (incorporated by reference to Exhibit
            10.1 to JSC's quarterly report on Form 10-Q for the
            quarter ended March 31, 1994).
10.14(a)    Consent and Amendment No. 1 dated as of February 23, 1995
            to the Credit Agreement among JSCE, JSC (U.S.) and the
            banks parties thereto (incorporated by reference to
            Exhibit 10.14(a) to JSC's Annual Report on Form 10-K for
            the fiscal year ended December 31, 1995).
10.14(b)    Waiver and Amendment No. 2 dated as of June 9, 1995 to
            the Credit Agreement among JSCE, JSC (U.S.) and the banks
            parties thereto (incorporated by reference to Exhibit
            10.14(b) to JSC's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1995).
10.14(c)    Waiver and Amendment No. 3 dated as of July 14, 1995 to
            the Credit Agreement among JSCE, JSC (U.S.) and the banks
            parties thereto (incorporated by reference to Exhibit
            10.14(c) to JSC's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1995).
10.14(d)    Amendment No. 4 dated as of October 16, 1995 to the
            Credit Agreement among JSCE, JSC (U.S.) and the banks
            parties thereto (incorporated by reference to Exhibit
            10.14(d) to JSC's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1995).
10.14(e)    Amendment No. 5 dated as of January 31, 1996 to the
            Credit Agreement among JSCE, JSC (U.S.) and the banks
            parties thereto (incorporated by reference to Exhibit
            10.14(e) to JSC's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1995).
18.1        Letter regarding change in accounting for pension plans
            (incorporated by reference to Exhibit 18.1 to JSC
            (U.S.)'s quarterly report on Form 10-Q for the quarter
            ended September 30, 1993).
21.1        Subsidiaries of the Company.
<PAGE>
24.1        Powers of Attorney (incorporated by reference to Exhibit
            24.1 to JSC's Annual Report on Form 10-K for the fiscal
            year ended December 31, 1995).
25.1        Statement on Form T-1 of the eligibility of NationsBank
            of Georgia, National Association, as Trustee under the
            1993 Senior Note Indenture (incorporated by reference to
            Exhibit 25.1 to JSC (U.S.)/CCA's Registration Statement
            on Form S-2 (File No. 33-58348)).
27.1        Financial Data Schedule.

(b)         Report on Form 8-K.
     The Company did not file any reports on Form 8-K during the
     three months ended December 31, 1995
<PAGE>
                                      SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


DATE   March 8, 1996                       JSCE, Inc.              
                                         (Registrant)

                       BY          /s/ John R. Funke            
                                       John R. Funke
                         Vice-President and Chief Financial Officer
       
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant in the capacities and on the date
indicated.
       
    SIGNATURE                   TITLE                                 DATE


             *                Chairman of the Board 
    Michael W. J. Smurfit     and Director

              *                President, Chief Executive            
    James E. Terrill           Officer and Director (Principal 
                               Executive Officer)

/s/ John R. Funke              Vice-President and Chief        March 8, 1996
    John R. Funke              Financial Officer (Principal 
                               Accounting Officer)

              *                Director
    Howard E. Kilroy


              *                Director
    Donald P. Brennan


              *                Director
    Alan E. Goldberg


              *                Director
    David R. Ramsay                                                      
                      

 
              *                Director
    James R. Thompson


              *                Director
    G. Thompson Hutton


* By /s/ John R. Funke         , pursuant to Powers of Attorney
         John R. Funke           filed as a part of the Form 10-K.
     As Attorney in Fact 

<PAGE>

</TABLE>
<TABLE>
                                             JSCE, Inc.
                           SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                            (In Millions)





       Column A                         Column B           Column C           Column D     Column E
                                       Balance at
                                      Beginning of                 Charged
                                       Period, as     Charged to   to Other   Deductions   Balance
                                       Previously     Costs and    Accounts   Describe     at End
      Description                       Reported      Expenses     Describe     <fn1>     of Period 
 
   <S>                                   <C>           <C>          <C>         <C>          <C> 
   Year ended December 31, 1995
   Allowance for doubtful accounts       $  9          $  1         $           $  1         $  9

   Year ended December 31, 1994
   Allowance for doubtful accounts       $  9          $  1         $           $  1         $  9

   Year ended December 31, 1993
   Allowance for doubtful accounts       $  8          $  4         $           $  3         $  9







<FN>
<fn1>  Uncollectible accounts written off, net of recoveries.
</FN>
</TABLE>